Question 1

You are at the checkout counter at the local supermarket, use your debit card to pay for your groceries, and select “credit” when the cashier asks “Debit or credit?” Where does the money for this purchase come from?

Accepted Answer

It is deducted directly from your checking account

Answer

Your credit card company covers the cost

Answer

Your credit card company provides you with a cash advance to cover the cost

Answer

It is deducted from your credit card account

Question 2

A person-to-person payment would best be used in which of these situations?

Accepted Answer

To repay your uncle who covered the cost of your first semester textbooks

Answer

To give a donation to someone soliciting contributions outside the grocery store

Answer

To buy some school supplies and baseball equipment while shopping online

Answer

To give a tip to the waitress at a diner

Question 3

Your friend Tammy just got a part-time job so she can afford to attend a school trip abroad later this school year. Tammy gets a paycheck on the 1st of every month, and a cash payment is due to the International Club advisor by the 3rd of every month with no exceptions. More than one late payment results in being removed from the trip. What recommendation do you have for Tammy?

Accepted Answer

Sign up for direct deposit with her employer so that the money is already in her account the morning of the 1st

Answer

Deposit the check through her mobile app on the 1st of the month and do a cash withdrawal from the ATM each month on the 2nd; hopefully the check clears in time to avoid fees

Answer

Use her 15-minute break during work on the 1st of each month to run to the check cashing business; hopefully she doesn’t get delayed by long lines and return to work late, which will anger her boss

Answer

Sign up for overdraft protection, withdraw the money from an ATM regardless of whether the funds are there in time, and just pay the $35 overdraft fee

Question 4

Jocelyn gets a text alert from the bank that her account has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

Accepted Answer

Contact her bank immediately as it appears that her account may have been hacked

Answer

Wait until her monthly statement arrives so she can check to see if those withdrawals are still there

Answer

Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry

Answer

Wait a week, as it is fairly common for the bank to catch mistakes like this

Question 5

Each of the following is a way to access money in your checking account EXCEPT...

Accepted Answer

Swipe a prepaid card to pay for your fast food purchase

Answer

Take out cash using your debit card at an ATM machine

Answer

Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal

Answer

Write a check to pay the rent on your apartment

Question 6

Devon lives in a large apartment complex, and his rent is due by the first of each month to “Richardson Rental Properties and Housing Options, LLC” which has its office 45-minutes away in downtown Houston. Which payment option makes the most sense if Devon is trying to be responsible and efficient with his time?

Accepted Answer

Use online auto bill pay

Answer

Hand-deliver cash

Answer

Ask his employer to set up direct deposit

Answer

Set up a text alert reminder to write and mail a check by the 28th of the previous month

Question 7

Which of the following transactions will REDUCE your checking account balance immediately?

Accepted Answer

Using your debit card to pay for groceries at the supermarket

Answer

Using your credit card to pay for your school books

Answer

Writing your monthly rent check which you will mail tomorrow

Answer

Depositing a check at a local bank branch

Question 8

Which of these is the most convenient feature of using online and mobile banking?

Accepted Answer

Using online banking, you can request transfers, bill pay, automatic savings, and other features without visiting the bank branch

Answer

You can shop online only if you've set up online banking

Answer

By signing up for online banking, you will activate the FDIC insurance on your account

Answer

Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees

Question 9

Which action below is considered a best-practice for check writing?

Accepted Answer

Recording all of your transactions in a check register

Answer

Writing quite sloppily in each field so that no one else can forge your handwriting

Answer

Using a pencil so that you can quickly erase any errors without having to throw any checks away

Answer

Leaving the “to” field blank until the very last minute, so that no one else can steal the check

Question 10

When signing up for a new checking account you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account. You go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

Accepted Answer

You will likely be charged an overdraft fee for EACH transaction and also will need to repay the bank for the amount overdrawn ($29)

Answer

Your account would be closed

Answer

The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

Answer

Because you requested overdraft protection, the bank will not allow you to overdraw your account, so your debit card will be denied in these 3 instances

Question 11

How are credit unions and banks different?

Accepted Answer

Banks are owned by shareholders, while credit unions are owned by members

Answer

Typically, deposits at a bank are insured, but deposits at a credit union are not

Answer

Banks allow customers to do online banking, while credit unions are too small to provide that service

Answer

Banks charge overdraft fees, but credit unions do not

Question 12

Using a digital wallet payment such as Apple Pay or Samsung Pay is considered safe because...

Accepted Answer

You do not need to hand your card to the cashier, so your personal information and account number remain private

Answer

They include overdraft protection for free when you use this payment type

Answer

Only major stores that can afford anti-hacking software accept these payments types

Answer

Not very many people have smartphones capable of using that payment type

Question 13

You find three receipts from your activities today: (1) ATM withdrawal of $60 plus $3 out-of-network ATM fee, (2) Debit card used for grocery bill of $34 plus cash back of $20, and (3) ATM deposit of $90 from birthday checks. What is your current balance if you started the day with $300 in your account?

Accepted Answer

$273

Answer

$300, because banks don't process any same-day transactions

Answer

$83

Answer

$333

Question 14

Which of the following transactions may NOT be reflected on your account balance if you go online to check your balances?

Accepted Answer

Check that you mailed to your cousin for his birthday today

Answer

ATM cash withdrawal from yesterday

Answer

Debit card transaction from purchasing snacks at a local convenience store today

Answer

Automatic payment for your car loan paid two days ago

Question 15

You visit a local bank that is FDIC-insured to open a checking account. Assume that you can only ask the bank representative one question before you open your account. What would it be?

Accepted Answer

What is your schedule of fees for this account?

Answer

Do I get cashback on all of my debit card purchases?

Answer

What is the interest rate on the account?

Answer

What happens if my debit card is stolen?

Question 16

The largest source of fees for banks when it comes to checking accounts is...

Accepted Answer

Overdraft fees

Answer

Interest expense

Answer

Check printing fees

Answer

Wire transfer fees

Question 17

How does a low-balance mobile alert on your checking account work?

Accepted Answer

It will alert you when your balance falls below a certain amount, and you will know to stop spending until you can add additional funds

Answer

When triggered it will automatically transfer money from your savings account so you don’t overdraw

Answer

It will freeze your account so that no one can make any withdrawals for 24-hours

Answer

It will make it impossible to overdraw your account

Question 18

Which best describes the difference between a checking statement and a checking agreement?

Accepted Answer

A statement shows you all of the deposits and withdrawals from your account, and an agreement shows you the terms of the account, such as fee structure and minimum requirements

Answer

A statement must be obtained in person at a bank branch, while an agreement can be downloaded from your online banking account

Answer

A statement shows you the terms of the account, such as fee structure and minimum requirements, and an agreement shows you all of the deposits and withdrawals from your account

Answer

A statement can be downloaded from your online banking account, while an agreement must be obtained in person at a bank branch

Question 19

When signing up for a new checking account you answer "No" to receive overdraft protection. On this day, you have $10 in your account. You go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

Accepted Answer

Because you turned down overdraft protection, the bank will not allow you to overdraw your account so your card will be denied in these 3 instances

Answer

You will likely be charged an overdraft fee for EACH transaction and need to repay the bank the funds overdrawn ($29)

Answer

Your account will be closed

Answer

The bank will provide you with five days to add funds to your account to cover the overdraft but will not charge you any fees.

Question 20

Why is it so important to have a checking account?

Accepted Answer

A checking account facilitates the rest of financial life by making your money available when and where you need it while also keeping it safe

Answer

Opening a checking account is the only way to gain access to a savings account, which is essential if you want to make money by investing

Answer

Without a checking account, you are unable to cash your paycheck or pay your taxes

Answer

Opening a checking account is the first step in building your credit history, which you will need in order to receive loans, scholarships, and grants for college

Question 21

Which statement about check cashing businesses is TRUE?

Accepted Answer

They allow customers to get access to their cash quickly with a fee

Answer

They are FDIC insured for deposits up to $250,000

Answer

They save customers time by only existing online and through mobile devices

Answer

They only charge fees if you are not a member

Question 22

While opening your checking account, the bank representative seems very interested in getting you to sign up for overdraft protection. What might explain his motivation?

Accepted Answer

Banks generate income by charging fees such as overdraft

Answer

He wants to protect your credit score

Answer

He is required by law to sign you up for overdraft protection

Answer

He wants to minimize the fees you might pay to the bank

Question 23

Leia has a checking account at a credit union, but she loads cash onto and uses prepaid cards sometimes, too. What might be her reason?

Accepted Answer

She feels the prepaid card prevents her from overspending because she loads on a fixed dollar amount and there is no option to overdraw

Answer

Credit unions charge fees every time she uses her debit card, whereas prepaid cards typically have no fees

Answer

She earns points, miles, and other perks by using a prepaid card that she doesn’t with her debit card

Answer

She can use a prepaid card to shop online but cannot do the same with a debit card

Question 24

Cam is moving from her childhood home in Scranton, PA to an apartment with her best friend in Los Angeles. She plans to stay 3-6 months to test whether she likes living on the West Coast, and then she may move again. Which of these is the BEST option for Cam when opening a checking account?

Accepted Answer

Open an account at a large national bank with a lot of branch locations

Answer

Sign up for whatever bank is offering the best promotion, such as a $50 bonus for new account holders

Answer

Join a local credit union in CA with no monthly fees and low overdraft fees

Answer

Keep the joint savings account she shares with her dad and just use that instead of opening a separate checking account

Question 25

Which of the following is a good habit to protect your checking account information?

Accepted Answer

Create complex passwords that are a long combination of letters, numbers, and symbols

Answer

Share login information with a few friends and family members so that trusted individuals can access your money in an emergency

Answer

Use your account number as your online banking password so it is easy for you to remember but difficult for others to guess

Answer

Carry the username and password for your online banking account in your purse or wallet in case you need it on-the-go

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