Banking Basics And Services Quiz! Exam

The correct answer is banking because banking is the business that primarily deals with money and credit. Banks provide various financial services such as accepting deposits, lending money, and facilitating transactions. They play a crucial role in the economy by managing funds, providing loans to individuals and businesses, and offering services like savings accounts, checking accounts, and credit cards. Therefore, banking is the most appropriate option as it aligns with the description of a business dealing with money and credit.

When a person publicly announces they cannot repay their loans, it is referred to as bankruptcy. Bankruptcy is a legal status that indicates an individual or organization's inability to repay their debts. It involves a formal declaration and can lead to the liquidation of assets or the establishment of a repayment plan. By declaring bankruptcy, the person acknowledges their financial difficulties and seeks legal protection from creditors.

A loan is the correct answer because it refers to the money that a person borrows from a bank or other financial institutions. It is a contractual agreement between the borrower and the lender, where the borrower agrees to repay the borrowed amount along with interest over a specified period of time. Loans are commonly used for various purposes such as purchasing a house, car, or funding education.

A deposit refers to the money that an individual places in a bank account for the bank to use for investment purposes. This money also earns interest, meaning that the individual will receive additional funds based on the interest rate set by the bank. A deposit is different from a loan, which involves borrowing money from the bank, and a mortgage, which is a loan specifically for purchasing real estate.

A mortgage is a loan that is used to finance the purchase of a home, business, or other real estate property. It is typically repaid over a period of time, usually with interest. Unlike a deposit, which is an amount of money placed into an account, or bankruptcy, which is a legal status indicating that a person or business is unable to repay their debts, a mortgage specifically refers to a loan for real estate purposes.

Opening a checking account requires completing a signature card because a signature card is a document that verifies the account holder's identity and provides their signature for future reference. This card is necessary to ensure that the account holder has authorized any transactions made on the account. Therefore, it is a standard procedure for banks to require customers to complete a signature card when opening a checking account.

A CD, in financial transactions, refers to a Certificate of Deposit. This is a type of time deposit offered by banks and financial institutions, where individuals deposit a certain amount of money for a fixed period of time, typically ranging from a few months to several years. In return, the depositor receives a certificate that represents their investment, along with a fixed interest rate. The funds deposited in a CD are generally not accessible until the maturity date, making it a low-risk investment option for individuals looking to earn interest on their savings.

A deposit slip is used to add funds to a bank account. This slip is filled out by the account holder and includes their account number, the amount being deposited, and any other necessary information. The deposit slip is then submitted to the bank along with the funds, allowing the bank to accurately credit the account with the deposited amount.

Interest is the correct answer because it refers to the amount of money that a bank charges for lending money to someone or the amount of money that a bank pays to someone for depositing their money. It is a fee or compensation for the use of borrowed money or for allowing the bank to use deposited funds for investment purposes. Interest is a common concept in banking and finance, representing the cost of borrowing or the return on investment.

A service charge on your bank statement will result in a lower balance because the charge is deducted from your account. This means that the amount of money available in your account will decrease, resulting in a lower balance.

A pawnshop primarily offers loans to individuals who provide collateral in the form of valuable items such as jewelry or electronics. These loans are typically short-term and are not specifically targeted towards people starting their own business. Therefore, the statement is false.

A credit union is a type of financial institution where groups of people, such as workers, come together to pool their money for savings and to provide loans to its members. Unlike traditional banks, credit unions are non-profit organizations that are owned and operated by their members. They offer various financial services, including savings accounts, loans, and other banking services. Therefore, the correct answer for this question is credit union.

A blank endorsement refers to signing a check without specifying a particular payee. By doing so, the check becomes payable to the bearer, which means anyone who possesses the check can cash it. Therefore, it is true that a blank endorsement allows anyone to cash a check.

An outstanding check does not refer to a check written on an account with a very low balance. Instead, it refers to a check that has been issued by the account holder but has not yet been cashed or deposited by the recipient.

Negative financial information can stay on your credit report for 7 years. This includes late payments, foreclosures, bankruptcies, and collections. During this time, lenders and creditors can assess your creditworthiness based on this information. After 7 years, the negative information should be removed from your credit report, allowing you to rebuild your credit history.

A credit report is a record of an individual's borrowing and repayment activities. It includes information about loans, credit cards, and bills, as well as the payment history associated with them. This report helps lenders and financial institutions assess a person's creditworthiness and determine their ability to repay debts. It does not include a list of financial assets and liabilities or a monthly credit card statement.