Name ___________________________________________

Date ____________

Financial Planning and Money Management Banking Review Sheet There will be a banking test next class. Please review Chapter 5 and study the following banking vocabulary terms and questions. On the test you will also have to complete a bank reconciliation problem and label the parts of the bank reconciliation model.
Debit Card Commercial Bank Outstanding Check Endorsement Overdraft protection Bank Reconciliation ATM Certificate of Deposit Direct Deposit Automatic Payment Compounding Point-of-Sale Transaction Deposit in Transit Credit Union Cancelled Check Voided check Stop payment Balance

$ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $

Directions Match the following the definitions with the vocabulary term. 1. ___________________________computer terminals that let you withdraw cash from your account, make deposits, and transfer money from one account to another. 2. ________________________ allows you to withdraw money or pay for purchases from your checking or savings account. 3. ________________________you use a debit card to purchase an item or a service at a retail store, in a restaurant, or elsewhere. 4. ________________________a for-profit institution that offers a full range of financial services, including checking, savings, and lending. 5. ________________________a nonprofit financial institution that is owned by its members and organized for their benefit. 6. ________________________a time deposit that requires you to leave your money in a financial institution for a set amount of time to earn a specified interest rate. 7. ________________________the process in which interest is earned on both the principal (the amount deposited) and on any previously earned interest. 8. ________________________an automatic loan made to you if you write a check for money than you have in your account. 9. ________________________a request that an institution not cash a particular check you wrote. Fees can range from $10-$40.

10. ________________________is the signature of the payee, the party to whom the check has been written. 11. ________________________is a report that accounts for the differences between the bank statement and your checkbook balance. Called Balancing Your Checkbook 12. ________________________A check that was a mistake and will never be paid. 13. ________________________ A check you have written that has not yet been paid by your bank. 14. ________________________ A deposit you have made and recorded in your check register but has not cleared by the bank in time to appear on your statement. 15. ________________________ A check you have written that has been paid by the bank. 16. ________________________ The total amount of money in your bank account is called 17. ________________________ When income you receive if automatically deposited into your account by your employer without you having to go to the bank. 18. ________________________ When your bank pays a scheduled bill for you without you having to write a check.

Review Questions

1. Joanne uses an ATM three times a week. It isnt her banks machine, but its located very close to her job. For every transaction, Joanne pays a fee of $1.50 from her bank and $1.50 from the ATMs bank. What is Joannes annual spending for the use of this ATM?

2. What is the FDIC? What does it stand for? Explain why your money is safer in an institution that participates in the FDIC program. How much protection does each person receive?

3. What is the difference between a debit card and a credit card?

4. What are the differences between a credit union and a commercial bank?

5. Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?

6. What are Travelers checks? Why are they used?

7. If a person makes a deposit of $10,000 or more into a bank account, who will the bank notify and why?

8. What fees may you encounter when using your ATM card? What are ways to reduce fees paid for ATM transactions?

9. When earning interest from a bank account, people hope the interest will keep up with what?

10. What is a CD? What are the advantages of purchasing a CD?

11. Can you take your money out of a CD early? If so what happens?

12. What is liquidity? Is a CD considered liquid? Explain why or why not.

13. When James received his paycheck, he planned to cash it at a check cashing store. You advise him to cash it at his own bank if possible. Why?

14. If you sell a valuable item to a stranger such as a car, which form of payment should you not accept?

15. What are the methods of payment to accept for selling a valuable item to a stranger, such as a car?

BANK STATEMENT
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REGISTER
___________________________ $_________

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( ) $__________

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( ) $_________

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( ) $_________

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( ) $_________ _______________________ ( ) $_________

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( ) $_________

Add/Subtract any corrections

$_________

Add/Subtract any corrections

$_________

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$_________

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$_________

REMEMBER - BOTH ENDING BALANCES SHOULD EQUAL.