Banking- How to Manage Your Money

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Which of these is an advantage unique to checking accounts?

Checking accounts enable the transfer of money electronically.
Checking accounts allow used checks to act as receipts.
Checking accounts use debit cards for easy access to money.
Checking accounts are set up to earn more interest if used more.

Checking accounts allow used checks to act as receipts.

When Seb reconciles his accounts, what is the first step he should take?

Compare his records and his statement.
Examine his statement to check for errors.
Confirm his records are accurate and include all transactions.
Check receipts to make sure all transaction amounts are correct.

Confirm his records are accurate and include all transactions.

Many checking accounts offer multiple ways of accessing money in addition to checks. Which of these can be used to access money in a checking account?

debit card
credit card
certificate of deposit
passbook

Debit card

Which of these is a characteristic of certificates of deposit (CDs)?

They are always offered at variable rates.
They last for a set period of time.
They can be opened with any amount of money.
They allow access to the money at any time without penalty.

They last for a set period of time.

Which of these is the best reason for Nina to maintain up-to-date and accurate records of her bank accounts?

to decide which bills to pay first
to determine how much she needs to earn
to stop herself from making financial mistakes
to know how much money she has for budgeting

To know how much money she has for budgeting.

Where do banks get money to lend to borrowers?

the bank’s management
their shareholders
the money market
their depositors

Their depositors

In which situation would a certificate of deposit (CD) be the best banking choice?

Samuel is setting money aside but still needs emergency access to it.
Hafsa wants a guaranteed return, and won’t need the money for several years.
Darren is looking for an investment that has a very high interest rate.
Raj is looking for an investment with a fast return so he can reinvest.

Hafsa wants a guaranteed return, and won’t need the money for several years.

Alex has not been keeping his banking records up to date. On his latest bank statement, he found that he had been charged an overdraft fee for writing a bad check. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?

The bank will close his account.
The merchant who received his check will be charged an overdraft fee.
The bank will cancel his debit card.
The merchant who received his check will expect repayment and a penalty fee.

The merchant who received his check will expect repayment and a penalty fee.

What is one benefit of purchasing saving bonds?

Saving bonds are purchased from the government and guaranteed to increase in value.
Saving bonds are purchased from commercial banks and guaranteed to increase in value.
Saving bonds are short term investments backed by the government to protect from loss.
Saving bonds are long term investments created to help first time home buyers obtain a mortgage.

Savings bonds are purchased from the government and guaranteed to increase in value.

What is the best reason for Jacinta to have a savings account in addition to a checking account?

A savings account protects her money from overdraft fees.
A savings account insures her money under the FDIC.
A savings account guards her money against inflation.
A savings account keeps her savings separate from her spending money.

A savings account keeps her savings separate from her spending money.

In which situation would a savings bond be the best investment to earn interest?

if you need access to your cash quickly
if you are saving each month for a new car
if you are putting aside a chunk of money to purchase a house in five years
if you have a large amount of money to save at one time

If you are putting aside a chunk of money to purchase a house in five years.

Glenn and Maggie own a regional chain of juice bars and are looking to expand in the coming year. They already have fifty shops, but they know they will need a loan to reach their goal of one hundred twenty five shops. Which type of banking institution is most suitable for Glenn and Maggie’s business?

a credit union
a savings and loan
a commercial bank
an investment bank

A commercial bank

Look at the table below showing an example of a checkbook ledger.

According to the table, what is Omar’s bank balance?

$761.25
$810.30
$814.75
$1,186.25

$761.25

What does reconciling an account involve?

checking one’s financial records against the bank’s
making sure a paycheck arrives on time
calculating the interest owed on a savings account
identifying instances of identity theft

Checking one’s financial records against the bank’s

Sara would like to open a bank account. What will she need to do this? Check all that apply.

identification card
high school diploma
money to start the account
birth certificate
proof of address

Identification card Money to start the account Proof of address

Which of these is a disadvantage of banking with national retail banks?

They have small ATM networks.
They charge fees for many services.
They offer a small range of products and services.
They are located primarily in and around cities.

They charge fees for many services.

What is a major difference between retail banks and credit unions?

Retail banks only serve businesses, while credit unions only serve individuals.
Retail banks operate in order to earn profit, while credit unions are nonprofit.
Retail banks only have small local branches, while credit unions are nationwide.
Retail banks manage a person’s money, while credit unions focus on providing loans.

Retail banks operate in order to earn profit, while credit unions are nonprofit.

Which of these is an advantage of checking accounts?

Checking accounts prevent the customer from having overdraft fees.
Checking accounts allow convenient ways to deposit or withdraw funds.
Checking accounts are processed immediately so customer and bank records always match.
Checking accounts offer limited checks but offer higher rates of interest.

Checking accounts allow convenient ways to deposit or withdraw funds.

This is a table that could be used to maintain a record of account transactions. It is similar to what is found in a checkbook ledger. Some of its column headings are missing. How should these columns be labeled?

Balance, Transaction Code, Description
Check Number, Description, Balance
Transaction Code, Balance, Notes
Description, Check Number, Balance

Check Number, Description, Balance

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