Question 1

The person who draws a check on his or her account is the

Accepted Answer

The person who draws a check on their account is referred to as the drawer. This is because they are the one who has written or "drawn" the check to make a payment to someone else, known as the payee.

Question 2

A cashier's check is also called a/an

Accepted Answer

A cashier's check is also known as a treasurer's check, which is a check guaranteed by the bank that issues it.

Question 3

A bank money order

Accepted Answer

A bank money order can indeed be used in place of a personal check, is similar to a postal money order, and can be obtained from a bank, making all the provided options correct.

Question 4

________ is an electronic delivery system for financial transactions.

Accepted Answer

Electronic funds transfer (EFT) is the correct answer because it refers to the process of transferring money electronically rather than using paper checks or cash.

Question 5

________ provides easy management of banking transactions online wherever you have access to the Internet.

Accepted Answer

Web banking allows users to manage their banking transactions online from any location with Internet access, offering convenience and flexibility.

Question 6

Check endorsements include the following kind(s) of endorsement:

Accepted Answer

All of the options listed (restrictive endorsement, bank endorsement, and full endorsement) are types of check endorsements.

Question 7

A comparison of the final bank balance on the bank statement with the company checkbook balance is called a/an

Accepted Answer

Bank reconciliation is the process of comparing the company's recorded transactions (checkbook balance) with the bank's records (bank statement) to identify and explain any differences.

Question 8

To calculate gross earnings on a payroll register when there is overtime,

Accepted Answer

Overtime earnings are calculated separately from regular earnings, and to find the gross earnings, you simply add the regular earnings to the overtime earnings. Choices A, B, and D do not accurately describe the process for calculating gross earnings with overtime.

Question 9

Another name for an income statement is a/an

Accepted Answer

An income statement is also known as a profit and loss statement because it shows the company's revenues and expenses, ultimately reflecting the profit or loss over a specific period.

Question 10

You can research current currency exchange rates by

Accepted Answer

All of the options provided are valid methods to research current currency exchange rates. Newspapers often have a financial section where exchange rates are listed, many websites and online tools provide up-to-date exchange rates, and banks also offer exchange rate information to their customers.

Question 11

The instrument used most often for transferring funds is the debit card.

Accepted Answer

The instrument used most often for transferring funds is electronic funds transfer (EFT), which includes various methods such as bank transfers, online payments, and direct deposits, not limited to the use of a debit card.

Question 12

A bank draft is a check drawn by a bank on its own funds in another bank located either in the same city or another city.

Accepted Answer

A bank draft is indeed a check that is drawn by a bank on its own funds but is payable through another bank, typically in a different location, making it a secure method of payment.

Question 13

When traveler's checks are lost or stolen, the owner usually can obtain a refund immediately by contacting a representative office of the company whose checks were purchased.

Accepted Answer

Traveler's checks are designed to offer a secure alternative to carrying cash, and one of their main benefits is that if they are lost or stolen, the owner can usually contact the issuing company to have them replaced or refunded, often quickly and with minimal hassle, provided they have the necessary information such as check numbers and proof of purchase.

Question 14

When a customer activates an automated teller machine with an EFT card and enters a PIN or secret password, the computer is ready to answer an inquiry about the customer's account, supply balance data, or dispense cash.

Accepted Answer

When a customer uses an EFT (Electronic Funds Transfer) card at an ATM (Automated Teller Machine) and enters their PIN (Personal Identification Number) or secret password, the system authenticates the user and can then provide account information, balance data, or dispense cash based on the user's requests.

Question 15

The company making an automatic deposit must be given the account's American Banking Association electronic pin number and the bank account number in which the money is to be deposit.

Accepted Answer

The company making an automatic deposit typically requires the bank's routing number (not an electronic pin number) and the recipient's account number to process the deposit.

Question 16

The drawee can request a stop-payment notification on a check for a fee only at certain days during the month.

Accepted Answer

The drawee (the person or entity who is expected to pay the check) can generally request a stop-payment order on a check at any time before it has been cashed or deposited, not just on certain days of the month. This is subject to the policies of the bank where the account is held.

Question 17

Cancelled checks are those checks that have not cleared the bank and are not listed on the monthly bank statement.

Accepted Answer

Cancelled checks are those that have been cleared or processed by the bank, not those that are pending or have not cleared. They are typically listed on the monthly bank statement as proof of payment.

Question 18

Two FICA taxes are required for all employees each payroll period--social security and Medicare.

Accepted Answer

Both Social Security and Medicare taxes are required components of FICA (Federal Insurance Contributions Act) taxes, and employers must withhold these taxes from employees' paychecks each payroll period.

Question 19

A master budget consists of various budgets that collectively express the company's future activities.

Accepted Answer

A master budget is a comprehensive financial planning document that includes various individual budgets related to sales, production, overhead, administration, and others, which together outline the company's financial goals, activities, and expected performance for a specific period.

Question 20

Using a perpetual inventory card is helpful to keep track of the inventory of supplies.

Accepted Answer

A perpetual inventory card helps in continuously updating the record of inventory levels after each transaction, ensuring accurate tracking of supplies.

Quiz 9: Handling Financial Procedures