Podcast
Questions and Answers
Which of these is an advantage unique to checking accounts?
Which of these is an advantage unique to checking accounts?
- Checking accounts enable the transfer of money electronically.
- Checking accounts are set up to earn more interest if used more.
- Checking accounts allow used checks to act as receipts. (correct)
- Checking accounts use debit cards for easy access to money.
When Seb reconciles his accounts, what is the first step he should take?
When Seb reconciles his accounts, what is the first step he should take?
- Examine his statement to check for errors.
- Check receipts to make sure all transaction amounts are correct.
- Compare his records and his statement.
- Confirm his records are accurate and include all transactions. (correct)
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?
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?
- Certificate of deposit
- Passbook
- Credit card
- Debit card (correct)
Which of these is a characteristic of certificates of deposit (CDs)?
Which of these is a characteristic of certificates of deposit (CDs)?
Which of these is the best reason for Nina to maintain up-to-date and accurate records of her bank accounts?
Which of these is the best reason for Nina to maintain up-to-date and accurate records of her bank accounts?
Where do banks get money to lend to borrowers?
Where do banks get money to lend to borrowers?
In which situation would a certificate of deposit (CD) be the best banking choice?
In which situation would a certificate of deposit (CD) be the best banking choice?
Alex has not been keeping his banking records up to date. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?
Alex has not been keeping his banking records up to date. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?
What is one benefit of purchasing saving bonds?
What is one benefit of purchasing saving bonds?
What is the best reason for Jacinta to have a savings account in addition to a checking account?
What is the best reason for Jacinta to have a savings account in addition to a checking account?
In which situation would a savings bond be the best investment to earn interest?
In which situation would a savings bond be the best investment to earn interest?
Glenn and Maggie own a regional chain of juice bars and are looking to expand in the coming year. Which type of banking institution is most suitable for their business?
Glenn and Maggie own a regional chain of juice bars and are looking to expand in the coming year. Which type of banking institution is most suitable for their business?
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Study Notes
Checking Accounts
- Checking accounts enable electronic money transfers and allow checks to serve as receipts.
- Accessible via debit cards, providing an easy way to withdraw funds.
Account Reconciliation
- First step in account reconciliation is confirming records are accurate and include all transactions.
Accessing Checking Accounts
- Debit cards are the primary means to access money in checking accounts.
Certificates of Deposit (CDs)
- CDs have a fixed duration and are not offered at variable rates or with immediate access without penalties.
Financial Record Keeping
- Up-to-date records help individuals budget effectively and manage finances without errors.
Bank Funding Sources
- Banks primarily obtain funds for lending from their depositors.
Investment Choices
- Certificates of Deposit are best for long-term savings when guaranteed returns are desired and funds won’t be needed for several years.
Overdraft Consequences
- In the event of an overdraft, merchants expect repayment and may apply a penalty fee.
Saving Bonds
- Government-backed saving bonds are guaranteed to appreciate in value over time.
Importance of Savings Accounts
- Savings accounts separate funds meant for saving from those used for daily expenses.
Interest-Earning Investments
- Savings bonds are ideal for saving towards a significant purchase, such as a house, planned for several years ahead.
Suitable Banking Institutions
- For business expansion needing significant capital, a commercial bank is the best fit.
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