Unit 1: Banking Basics And Services

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1. When a person publicly announces they cannot repay their loans it is called

Explanation

When a person publicly announces they cannot repay their loans, it is referred to as bankruptcy. Bankruptcy is a legal status that declares an individual or business unable to pay off their debts. By declaring bankruptcy, the person acknowledges their inability to repay their loans and seeks legal protection and assistance in managing their financial situation.

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About This Quiz
Unit 1: Banking Basics And Services - Quiz

Explore the fundamentals of banking in 'Unit 1: Banking Basics and Services'. This quiz covers key concepts such as banking operations, interest, loans, deposits, mortgages, and bankruptcy. It... see moreassesses understanding of essential financial services and their impact. see less

2. The business dealing with money and credit is

Explanation

The correct answer is banking because banking is the business that primarily deals with money and credit. Banks accept deposits from customers, provide loans and credit facilities, and offer various financial services such as investment management, foreign exchange, and insurance. Banking plays a crucial role in the economy by facilitating transactions, promoting savings and investments, and providing financial stability. Therefore, banking is the most appropriate choice among the given options.

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3. The money that a person borrows from a bank or other financial institutions is called a

Explanation

A loan refers to the money that an individual borrows from a bank or other financial institutions. It is a sum of money that is provided to the borrower, who agrees to repay it over a certain period of time, typically with interest. Loans are commonly used for various purposes such as purchasing a house, car, or funding education. The correct answer is "loan" because it accurately describes the money borrowed from a bank or financial institution.

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4. A loan to pay for a home, business or other real estate over a period of time is a

Explanation

A mortgage is a loan that is used to finance the purchase of a home, business, or other real estate property over a specific period of time. Unlike a deposit, which is an amount of money that is paid upfront as a security or down payment, a mortgage involves borrowing money from a lender and repaying it gradually, typically with interest, until the loan is fully paid off. Bankruptcy, on the other hand, refers to a legal process where a person or business is unable to repay their debts and seeks relief from their financial obligations.

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5. The money that a person places in a bank account for the bank to use to invest and that also earns interest is called a

Explanation

A deposit refers to the money that an individual places in a bank account for the bank to use for investment purposes. The bank then pays the depositor interest on this money. This arrangement allows the bank to utilize the deposited funds for lending and other investment activities, while the depositor earns interest on their money. Therefore, a deposit is the correct answer as it accurately describes the situation described in the question.

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6. In financial transactions, a CD is a:

Explanation

A CD, in financial transactions, stands for Certificate of Deposit. A Certificate of Deposit is a financial product offered by banks and other financial institutions where an individual deposits a certain amount of money for a fixed period of time. In return, the bank pays interest on the deposit. The purpose of a CD is to provide a safe and secure investment option with a fixed rate of return. It is commonly used by individuals who want to earn interest on their savings without taking on too much risk.

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7. Opening a checking account requires completing a signature card.

Explanation

To open a checking account, completing a signature card is necessary. A signature card is a document that verifies the account holder's signature, providing a means of identification and authorization for transactions. This card is typically filled out during the account opening process and serves as a reference for comparison when the account holder signs checks or other financial documents. Therefore, the statement "Opening a checking account requires completing a signature card" is true.

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8. A pawnshop offers loans to people starting their own business.

Explanation

This statement is false because a pawnshop typically offers loans by accepting personal items as collateral. Pawnshops do not specifically cater to people starting their own business.

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9. Groups of people such a workers who pool their money together for savings and to make loans is called a

Explanation

A credit union is a financial cooperative where groups of people, such as workers, pool their money together for savings and to make loans. Unlike traditional banks, credit unions are owned and operated by their members, who have a say in the decision-making process. This allows members to benefit from lower interest rates on loans, higher interest rates on savings, and personalized customer service. Therefore, a credit union is the correct answer for the given question.

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10. A ____________________ is used to add funds to a bank account.

Explanation

A deposit slip is used to add funds to a bank account. When a person wants to deposit money into their account, they fill out a deposit slip with their account number, the amount they are depositing, and any other required information. The slip is then given to the bank teller along with the cash or check being deposited. The teller uses the deposit slip to accurately credit the funds to the correct account.

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11. A service charge on your bank statement will result in:

Explanation

A service charge on your bank statement will result in a lower balance because it represents a fee charged by the bank for providing certain services, such as account maintenance or transaction processing. This fee is deducted from your account balance, reducing the total amount of money available. Therefore, the presence of a service charge will decrease the balance shown on your bank statement.

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12. A blank endorsement allows anyone to cash a check.

Explanation

A blank endorsement on a check means that the back of the check is left blank without any specific payee information or restrictions. This type of endorsement essentially turns the check into a bearer instrument, allowing anyone who possesses the check to cash or deposit it. Therefore, it is true that a blank endorsement allows anyone to cash a check.

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13. A outstanding check refers to one written on an account with a very low balance.

Explanation

An outstanding check refers to a check that has been written by the account holder but has not yet been cashed or cleared by the bank. It does not necessarily have to be written on an account with a very low balance. Therefore, the statement that an outstanding check refers to one written on an account with a very low balance is false.

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14. The amount of money a bank charges for the privilege of allowing a person to borrow money or the amount of money the bank pays a person for depositing his money for the bank to invest is called.

Explanation

Interest refers to the amount of money that a bank charges a borrower for the privilege of borrowing money or the amount of money that the bank pays a depositor for depositing their money for the bank to invest. It is a fee or compensation for the use of borrowed funds or the opportunity cost of lending money. Interest rates are typically expressed as a percentage of the loan or deposit amount and can vary based on factors such as the borrower's creditworthiness and prevailing market conditions.

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15. Negative financial information can stay on your credit report for?  

Explanation

Negative financial information can stay on your credit report for 7 years. This includes late payments, accounts in collections, and bankruptcies. During this time, lenders and creditors can assess your creditworthiness based on this information, which may impact your ability to obtain credit or loans. It is important to maintain good financial habits and make timely payments to avoid negative information on your credit report.

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16. A credit report is

Explanation

A credit report is a record of an individual's borrowing and repayment activities. It includes information about loans taken out, such as mortgages or car loans, as well as payment history for bills and other financial obligations. This report is used by lenders, landlords, and other financial institutions to assess an individual's creditworthiness and determine their ability to repay debts. It provides a comprehensive overview of a person's financial history and helps lenders make informed decisions about granting credit.

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When a person publicly announces they cannot repay their loans it is...
The business dealing with money and credit is
The money that a person borrows from a bank or other financial...
A loan to pay for a home, business or other real estate over a period...
The money that a person places in a bank account for the bank to use...
In financial transactions, a CD is a:
Opening a checking account requires completing a signature card.
A pawnshop offers loans to people starting their own business.
Groups of people such a workers who pool their money together for...
A ____________________ is used to add funds to a bank account.
A service charge on your bank statement will result in:
A blank endorsement allows anyone to cash a check.
A outstanding check refers to one written on an account with a very...
The amount of money a bank charges for the privilege of allowing a...
Negative financial information can stay on your credit report...
A credit report is
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