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WorksheetsBanking Basics Quiz
Total questions: 61
Worksheet time: 33mins
What is a check?
A written order to a bank to pay the amount stated to the person or business named on it.
A type of savings account.
A loan from the bank.
A credit card transaction.
What is another name for a checking account?
Savings account
Demand deposit
Fixed deposit
Recurring deposit
Why is a checking account also called a demand deposit?
Because the money may be withdrawn at any time.
Because it earns high interest.
Because it is a type of loan.
Because it requires a minimum balance.
What is the first step in the process of a check going through the banking system?
The bank stamps the back of your check.
The payee cashes your check.
Your bank withdraws the money from your account.
The bank that cashed the check returns it to your bank.
What happens after the bank that cashed the check returns it to your bank?
The payee cashes your check.
Your bank stamps the back of your check.
Your bank withdraws the money from your account.
A canceled check is a check that has cleared your account.
What does your bank do to indicate that a check has cleared?
Withdraws the money from your account.
Returns the check to the payee.
Stamps the back of your check.
Sends the check to the other bank.
What is a canceled check?
A check that has been returned to the payee.
A check that has been stamped by the bank.
A check that has cleared your account.
A check that has been withdrawn from your account.
Why do many banks no longer send paper checks to other banks for processing?
To make processing faster and more efficient
To reduce the number of checks processed
To increase the use of paper checks
To avoid electronic transactions
What is a substitute check?
A check that is used to replace a lost check
An image of the check transmitted electronically
A check that is used for international transactions
A check that is used for large transactions only
How can a substitute check be used?
In the same way as an original check
Only for electronic transactions
Only for international transactions
Only for large transactions
What must you maintain in your account to cover all the checks you write?
A) A minimum balance
B) Enough money
C) A credit line
D) A savings account
What is a check written for more money than your account contains called?
A) Insufficient check
B) Bounced check
C) Overdraft
D) NSF check
What does a bank usually stamp on a check that it does not honor?
A) "Insufficient balance"
B) "Not sufficient funds" (NSF)
C) "Overdraft"
D) "Bounced check"
What happens when a check is stamped with "not sufficient funds" (NSF)?
A) The check is honored
B) The check is returned to the payee’s bank
C) The check is processed
D) The check is deposited
What does it mean when a check has bounced?
A) The check is honored
B) The check is returned due to insufficient funds
C) The check is processed
D) The check is deposited
What will your bank charge you for each NSF check processed?
A) A fee
B) A penalty
C) An interest
D) A service charge
What does "floating a check" mean?
Writing a check and hoping to deposit money to cover it before the check clears.
Writing a check and immediately depositing money to cover it.
Writing a check without any intention of covering it.
Writing a check and waiting for it to bounce.
Why is floating a check considered very risky?
Because checks can be lost in the mail.
Because today's electronic systems allow checks to process very quickly.
Because it is difficult to track checks.
Because checks can be easily forged.
Is floating a check legal in most states?
Yes, it is legal.
No, it is illegal.
It depends on the amount of the check.
It is legal if the check is covered within 24 hours.
Which of the following is an advantage of having a checking account?
High interest rates
Convenience
Limited access to funds
No record keeping
What is one of the safety benefits of a checking account?
High interest rates
Built-in record keeping system
Safety
Limited access to funds
Which of the following is NOT an advantage of a checking account?
Built-in record keeping system
Access to bank services
High interest rates
Convenience
What is one of the requirements for opening a checking account?
Credit check
Signature authorization form
Proof of employment
Minimum age of 21
What is typically needed as an initial step to open a checking account?
Credit card
Initial deposit
Loan application
Tax return
Which part of a check contains the name and address of the person who wrote the check?
Payee
Memo
Name and Address of Maker
Signature
What information is found in the top right corner of a check?
Date
Check Number
ABA Number
Written Amount
Where on a check would you find the written amount in words?
Numeric Amount
Memo
Payee
Written Amount
What is the purpose of the memo line on a check?
To indicate the date
To specify the amount in numbers
To provide a note about the purpose of the check
To show the payee's name
Which part of a check shows the bank's routing number and the account number?
ABA Number
Account and Routing Numbers
Check Number
Signature
Where is the payee's name written on a check?
In the memo line
Next to the written amount
In the "Pay to the Order of" line
Next to the signature
What does the ABA number on a check represent?
The check number
The bank's routing number
The account number
The written amount
Where is the signature of the person writing the check located?
Next to the date
Below the written amount
At the bottom right corner
Next to the payee's name
What is the numeric amount on a check?
The amount written in words
The amount written in numbers
The check number
The date
What information is typically found in the top left corner of a check?
The date
The payee's name
The name and address of the maker
The numeric amount
Which of the following is NOT mentioned as a way to use your checking account?
Writing checks
Paying bills online
Making deposits
Investing in stocks
What is a checkbook register used for?
Recording checking account transactions
Calculating interest on savings
Tracking credit card expenses
Managing investment portfolios
What is the process of matching your checkbook register with the bank statement called?
Bank reconciliation
Bank statement analysis
Checkbook balancing
Financial auditing
What is the first step in reconciling your checking account?
Add credits or deposits not on the statement.
Write ending balance from bank statement.
List checks, withdrawals, and debits made but not shown on statement.
Subtract line 5 from line 3.
Which step involves adding credits or deposits not shown on the statement?
Step 1
Step 2
Step 3
Step 4
What should you do after totaling lines 1 and 2?
List checks, withdrawals, and debits made but not shown on statement.
Subtract line 5 from line 3.
Write ending balance from bank statement.
Add credits or deposits not on the statement.
What is the final step in reconciling your checking account according to the document?
Total lines 1 and 2.
List checks, withdrawals, and debits made but not shown on statement.
Subtract line 5 from line 3.
Add credits or deposits not on the statement.
What is the purpose of subtracting line 5 from line 3 in the reconciliation process?
To find the total outstanding checks/debit transactions.
To match the checkbook balance.
To list all checks, withdrawals, and debits.
To add credits or deposits not on the statement.
What is the total of outstanding debit transactions in the provided example?
(a)
A check generally cannot be cashed until it is:
Signed by the bank
Endorsed
Deposited
Written
To endorse a check, the payee signs the top part of the back of the check in:
Pencil
Ink
Marker
Crayon
Which of the following is NOT a major type of endorsement?
Blank endorsement
Special endorsement
Restrictive endorsement
Conditional endorsement
What is a blank endorsement?
The signature of the payee written exactly as his or her name appears on the front of the check.
A type of endorsement where the payee writes "For Deposit Only."
An endorsement that includes the payee's account number.
A type of endorsement that requires a witness signature.
Which of the following is an example of a blank endorsement?
What is a special endorsement?
An endorsement that transfers the right to cash the check to someone else.
An endorsement that restricts the check to be deposited only.
An endorsement that allows the check to be cashed by anyone.
An endorsement that voids the check.
Which of the following is another term for a special endorsement?
Blank endorsement
Restrictive endorsement
Endorsement in full
Conditional endorsement
What does a special endorsement allow?
It allows the check to be cashed by anyone.
It allows the check to be deposited only.
It transfers the right to cash the check to someone else.
It voids the check.
What does a restrictive endorsement do?
Allows anyone to cash the check
Restricts or limits the use of a check
Makes the check invalid
Transfers the check to another person
Which of the following is an example of a restrictive endorsement?
Pay to the order of John Doe
For Deposit Only United California Bank Acct. #8-2011-4 Donald MacLane
Pay to the order of Jane Smith
Endorsed by John Doe
Which of the following is a type of checking account?
Savings accounts
Joint accounts
Fixed deposit accounts
Recurring deposit accounts
Which type of checking account is designed for multiple users?
Special accounts
Standard accounts
Joint accounts
Share accounts
Which type of checking account typically offers interest on the balance?
Special accounts
Interest-bearing accounts
Standard accounts
Share accounts
Which type of checking account is likely to have unique features tailored to specific needs?
Joint accounts
Special accounts
Standard accounts
Share accounts
What is a full-service bank?
A bank that offers only savings accounts
A bank that offers only loans
A bank that offers every possible kind of service
A bank that offers only credit cards
Which of the following services is NOT commonly offered by a full-service bank?
Online banking
Telephone banking
Real estate services
Certified checks
What does FDIC insurance protect?
The bank's investments
The bank's employees
The deposits of customers against loss
The bank's physical assets
Up to what amount does FDIC insurance protect customer deposits?
$100,000 per account
$250,000 per account
$500,000 per account
$1,000,000 per account
