Fundamentals of Accountancy, Business and Management 2 Preliminary Examination

What is the primary purpose of a savings account?

• To obtain a loan

• To make frequent withdrawals

• To earn interest on deposited money

• To store money for future use

You are saving up for a down payment on a house and want to earn the highest interest rate possible on your savings. You also need to be able to access your money occasionally to pay for unexpected expenses. Which type of account would be best for you?

• A money market account

• A certificate of deposit (CD)

• A traditional savings account

• A checking account

What type of financial institution typically offers savings accounts?

• Banks

• Pawn Shops

• Stock Exchange

• Credit card companies

Imagine you've just received your first paycheck from your summer job. You're excited to have earned some money, but you know it's important to be smart with it. You've heard about savings accounts, but you're not sure exactly what they are or how they work. What are the main benefits of using a savings account for your summer earnings?

• Access to high-risk investments

• Security for your money with interest earnings.

• Ability to spend freely without limitations

• Easy access to loans with higher rates

You're grocery shopping and realize you forgot your debit card at home. You only have $20 in cash, but your groceries total $30. What type of bank transaction could you use to complete your purchase?

• Wire transfer

• Check deposit

• Cash advance using your ATM card

• Online bill payment

A banking form that customers use when depositing funds into a bank account.

• Deposit slip

• Deposit name

• Deposit amount

• Deposit's account number

Imagine you're designing a new withdrawal slip for your bank. What additional information could you include on the slip that would be helpful to customers? (Choose the best option and explain your choice.)

• A space for the customer's name and contact information.

• A bar code for the customer to scan with their phone.

• A breakdown of the withdrawal amount into different denominations of bills.

• A list of the bank's current interest rates.

What is the name of the document that instructs a bank to pay a specified amount to another person or organization?

• Receipt

• Invoice

• Bank check

• Credit card statement

What are the two main causes of discrepancies between a company's cash records and its bank statement?

• Fraud and theft

• Timing differences and errors

• Bank fees and interest

• Software updates and maintenance

You are reconciling your company's bank statement and notice a deposit of $1,000 that is not recorded in your cash account. What should you do?

• Ignore the discrepancy, as it will likely be corrected automatically

• A. Investigate the deposit and adjust your records accordingly.

• A. Contact the bank and request a revised statement.

• A. Write off the amount as unrecoverable bad debt.