Deck 4: Banking

Question 1

Which of the following, in a bank statement reconciliation, would be deducted from the bank statement balance?

A) bank service charges
B) outstanding deposits
C) NSF charges
D) outstanding checks

Answer 1

D

Question 2

The bank code number and the checking account number are printed along the bottom of a check so that they can be read by a computer.

Answer 2

True

Question 3

Overdraft protection is a fee that banks charge for checking account maintenance.

Answer 3

False

Question 4

Checks that you have written, but are not listed on the bank statement, are called:

A) outstanding
B) in transit
C) delayed
D) NSF

Question 5

Personal checks and some business checks have a line called a for the maker to describe what the check is for.

A) signature card
B) check register
C) check stub
D) memo

Question 6

Banks pay interest on some checking accounts.

Question 7

In a bank statement reconciliation, which of the following should be added to the bank statement balance?

A) collection of a note by the bank
B) outstanding checks
C) bank service charge
D) outstanding deposits

Question 8

While banking procedures are designed to prevent misuse of checks, it is a good idea to use a:

A) restricted endorsement
B) qualified endorsement
C) pure endorsement
D) simple endorsement

Question 9

A check endorsed "For Deposit Only" can only be cashed by the person who endorsed the check.

Question 10

The primary difference between a check register and a check stub is that the check register is attached to the check.

Question 11

When opening a checking account, the authorized signer(s) must sign a check stub, which is kept on record at the bank.

Question 12

When a check stub is completed, the balance from the previous check should be brought forward; any deposits are added and the check amount is deducted to arrive at the new balance.

Question 13

The letters NSF mean Non-Savings Funds and represent the amount on deposit in your account that is available for withdrawal.

Question 14

A credit memorandum, when received from the bank, should be?

A) added to the bank balance
B) added to the checkbook balance
C) subtracted from the checkbook balance
D) ignored

Question 15

The bank statement lists all the checks written and deposits made by a customer during the statement period.

Question 16

An ATM is an overdraft protection process that allows you to write checks when your account balance is less than the amount of the checks.

Question 17

The fee a bank charges for maintaining a checking account is referred to as a(n):

A) NSF charge
B) service charge
C) ATM charge
D) returned check charge

Question 18

According to the Board of Governors of the Federal Reserve Board, an endorsement must be:

A) on the face of the check
B) on the back of the check, within $1 \frac { 1 } { 2 }$ " of the left edge
C) on the face of the check, on the signature line
D) on the back of the check, any position

Question 19

In the reconciliation process, a note collected by the bank should be?

A) added to the register balance
B) added to the bank statement balance
C) deducted from the bank statement balance
D) deducted from the register balance

Question 20

The checkbook should be credited when a memorandum for which of the following is received?

A) overdraft charge
B) interest earned
C) NSF
D) service charge

Question 21

Service charges represent fees that banks pay you for keeping your money on deposit at their institution.

Question 22

Writing the words "For Deposit Only" along with your checking account number on the back of a check is called a:

A) qualified endorsement
B) restricted endorsement
C) pure endorsement
D) simple endorsement

Question 23

"Outstanding deposits" are those deposits that appear in your records, but do not appear on your bank statement.

Question 24

A debit memorandum discovered during the reconciliation process should be:

A) added to the book balance of cash
B) added to the bank statement balance of cash
C) deducted from the book balance of cash
D) deducted from the bank statement balance of cash

Question 25

When writing the verbal amount on a check, the decimal position is represented by the word "dot."

Question 26

In a bank reconciliation, outstanding checks are:

A) subtracted from the bank statement
B) added to the checkbook
C) subtracted from the checkbook
D) added to the bank statement

Question 27

The one who writes the check and directs the payment of funds is known as the:

A) drawee
B) maker
C) endorsee
D) payee

Question 28

The_________________ is a form kept with the checks and is used to record checks written and deposits made.

A) deposit slip
B) stub
C) checkbook
D) check register

Question 29

Before a check can be deposited or cashed, it must be:

A) approved
B) verified
C) endorsed
D) restricted

Question 30

When completing a check stub, to arrive at the ending balance, take the beginning balance and:

A) add the deposit and the check
B) add the check and subtract the deposit
C) subtract the check and the deposit
D) subtract the check and add the deposit

Question 31

The primary form used in a checking account is a check register.

Question 32

The one to whom a check is written and the money paid is called the:

A) maker
B) payor
C) drawer
D) payee

Question 33

Check registers are used to record checks written and deposits made.

Question 34

It is a good idea to use a restricted endorsement when depositing a check.

Question 35

Checks that have not been presented to the bank at the time of statement processing are referred to as outstanding checks.

Question 36

Outstanding checks:

A) are the checks that are returned to the payor
B) have been presented to the bank and paid
C) have not been received and processed by the bank
D) are the bank's checks

Question 37

A bank statement contains a listing of all the transactions recorded by the bank during the statement period.

Question 38

When a checking account is opened, the person(s) who will be writing checks must sign a:

A) deposit slip
B) check register
C) signature card
D) check stub

Question 39

The safest type of endorsement is a blank endorsement.

Question 40

The bank increases your account balance when it credits your account.

Question 41

A listing of all transactions by the bank that took place in a customer's account during the month is called a:

A) check book
B) check register
C) bank reconciliation
D) bank statement

Question 42

The bank statement is the primary tool used in reconciling a checking account.

Question 43

The payee of a check is recorded in the memo portion.

Question 44

If a check that you deposit is returned NSF, the bank credits your account for the amount of the check.

Question 45

An electronic funds transfer does not eliminate the need to write a check.

Question 46

Deposits that appear on your records, but not on the bank statement, are known as:

A) NSF
B) ATM
C) outstanding
D) in transit

Question 47

The payee of a check is the person who writes it.

Question 48

A credit memorandum, when received from the bank, should be:

A) added to the bank balance
B) ignored
C) added to the checkbook balance
D) subtracted from the checkbook balance

Question 49

When reconciling your bank statement, outstanding checks should be deducted from the balance shown on your bank statement.

Question 50

When reconciling a bank account, an unrecorded bank service charge is:

A) added to the bank statement balance
B) subtracted from the bank statement balance
C) added to the checkbook balance
D) subtracted from the checkbook balance

Question 51

When depositing money into a checking account, a deposit slip is not needed.

Question 52

In the process of reconciliation which of the following should be deducted from the register balance?

A) bank service charges
B) credit from the bank
C) interest paid by the bank
D) automatic paycheck deposit

Question 53

When you receive your bank statement, the bank's balance should always agree with your account register.

Question 54

When money is to be added to a checking account, a___________ is normally filled out.

A) signature card
B) receipt
C) deposit slip
D) check book

Question 55

When reconciling the bank statement, outstanding deposits are:

A) subtracted from the bank statement
B) subtracted from the checkbook
C) added to the checkbook
D) added to the bank statement

Question 56

The payee endorses the back of a check.

Question 57

The person who signs a check on the back is the maker.

Question 58

Point-of-sale transactions are examples of electronic funds transfers.

Question 59

It is not necessary to list checks and cash amounts separately on a deposit slip.

Question 60

Overdraft protection is a good substitute for reconciling your bank account on a regular basis.

Question 61

Reconcile the bank statement with the check register balance. Find the current balance.
$$\begin{array} { c r } \text { Balance from bank statement } & \$ 2679.58 \\\text { Outstanding checks (Debits) } & \$ 881.04 \\& \$ 530.96 \\& \$ 870.19 \\& \$ 973.77 \\& \$ 422.16 \\\text { Outstanding deposits (Credits) } & \$ 221.84 \\& \$ 930.81 \\& \$ 451.84 \\& \$ 38.54 \\\text { Bank service charge } & \$ 12.68 \\\text { Adjustments (Interest credit) } & \$ 631.81 \\\text { Check register balance } & \\\hline \text { Current balance } &\end{array}$$

A) $580.09
B) $605.95
C) $631.81
D) $2653.72

Question 62

Find the total deposit using the given deposit slip.
On September 2nd, 20xx, Mary made a deposit to the account for Joe's Repair Shop. The deposit includes the following items: coins: $28.04; and checks: Hwang, $35.19; Hartmann, $72.92; Pisani, $40.83; Evers, $18.53; Meachem, $81.12; Jones, $20.77; and Williams, $75.31.

A) $430.86
B) $314.56
C) $14.91
D) $372.71

Question 63

The need for tellers has been completely eliminated by ATMs.

Question 64

If the bank discovers an error and increases your account balance, the memo you receive from the bank is a credit memo.

Question 65

The difference between your checkbook balance and the bank statement balance is due primarily to fraud.

Question 66

Upon receipt of your bank statement you should first check for letter codes or symbols and for any transactions that you do not have a record of or do not understand.

Question 67

Find the total deposit using the given deposit slip.
On March 15th, 20xx, Mary made a deposit to the account for Joe's Repair Shop. The deposit includes the following items: coins: $199.04; and checks: O'Malley, $80.79; Greenburg, $88.15; Dowell, $158.92; Harper, $165.68; James, $160.71; Johnson, $49.34; and West, $66.76.

A) $29.08
B) $1074.49
C) $969.39
D) $864.29

Question 68

Outstanding checks always result in overdrafts.

Question 69

A check that was outstanding in a previous month's bank reconciliation was again not included in the canceled checks returned by the bank. When reconciling the statement this month, the amount of the check should be:

A) added to the bank statement balance
B) deducted from the bank statement balance
C) added to the book balance of cash
D) deducted from the book balance of cash

Question 70

A___________ is attached to a check by perforation, and is used to record checks written and deposits made.

A) check stub
B) signature card
C) deposit slip
D) check register