POB 4.02 - Financial Institutions Question Preview (ID: 19226)


Selecting A Financial Institution. TEACHERS: click here for quick copy question ID numbers.

Direct Finance Company's primary function is to use its own money instead of customers' savings to provide loans to other businesses. This is an example of which type of financial institution?
a) Depository
b) Check-cashing outlet
c) Non-depository
d) Pawnshop

Southern Life Insurance Company makes money on selling specific services such as policies instead of retaining their customers money. This is an example of which type of financial institution?
a) Depository
b) Check-cashing outlet
c) Non-depository
d) Pawnshop

Sarah purchased school supplies with a store gift card of $300. This is an example of which type of payment service?
a) Cashier's check
b) Certified check
c) Electronic
d) Money Order

Phil is writing a company check and just completed writing the amount of the check in words. What should Phil do NEXT?
a) Write the payee's name
b) Sign the check
c) Write in the numerical amount of the check
d) Write in the purpose of the check

Maria prefers an endorsement that will make sure checks are used for deposits only to her business account. Which type of endorsement is preferred?
a) Blank endorsement
b) Full endorsement
c) No endorsement
d) Restrictive endorsement

Todd gave Intrek Computer Services a personal check for which his bank guaranteed payment. This is an example of which type of payment service?
a) Certified check
b) Money Order
c) Electronic
d) Traveler's Check

Jennifer prefers a financial institution that will meet her business needs such as access to checking options, credit cards, and loans. Which characteristic(s) of financial institutions does she prefer?
a) Fees and charges
b) Restrictions
c) Services
d) Safety

The Federal Reserve System approved the merger of Wachovia Bank and Wells Fargo Bank. This is an example of which service of the Federal Reserve System?
a) Acting as a clearinghouse
b) Approving bank mergers
c) Managing the discount rate
d) Participating in open market activities

Mary is writing a company check, and has just completed writing the purpose of the check. What should she do NEXT?
a) Write the payee's name
b) Sign the check
c) Write in the numerical amount of the check
d) Write in the purpose of the check

James received a $100 check. He wants to endorse this check over to Steve. Which type of endorsement should James use?
a) Blank
b) Full
c) Non-endorsement
d) Restrictive

Which is the FIRST step in opening a checking account?
a) Completing a signature card
b) Completing a bank reconciliation
c) Ordering a set of checks
d) Receiving the first cancelled check

Which is the FIRST step in the check writing process?
a) Writing the appropriate information in the check register
b) Writing the drawer's signature
c) Writing the payee's name
d) Writing the purpose of the check

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