Deposit account - Quiz
  • 1. What is the nature of the relationship between a bank and a depositor?
A) Partnership
B) Shareholder-corporation
C) Debtor-creditor
D) Employer-employee
  • 2. How is a customer's deposit recorded on a bank's balance sheet?
A) As revenue
B) As a liability
C) As an asset
D) As equity
  • 3. What happens to the legal title of cash when a customer deposits it into an account?
A) The customer retains it
B) It is held by a third-party trustee
C) It remains with the central bank
D) The customer surrenders it to the bank
  • 4. What is the process called where banks lend out most of the money deposited by customers?
A) Central banking
B) Fractional-reserve banking
C) Direct lending
D) Full-reserve banking
  • 5. What is the primary way banks avoid using physical cash for payments?
A) Printing more currency
B) Increasing interest rates
C) Selling bank assets
D) Transferring ownership of deposits
  • 6. Which of the following is considered an asset of a bank?
A) The deposit liability
B) The interest owed to customers
C) The cash received from a deposit
D) Customer withdrawal rights
  • 7. What does the term 'withdraw' mean in the context of banking?
A) Paying money into an account
B) Transferring funds between banks
C) Taking money out of an account
D) Borrowing funds from a lender
  • 8. What do commercial banks create when they issue a loan by depositing proceeds into a checking account?
A) Physical banknotes
B) Central bank reserves
C) Legal tender
D) Economic money
  • 9. What determines the methods a customer uses to move money into or out of an account?
A) The type of currency used
B) The central bank's policy
C) The bank's physical location
D) The terms and conditions of the account
  • 10. On the bank's books, when $100 is deposited, what is debited?
A) The deposits liability account
B) The cash account
C) The interest expense account
D) The equity account
  • 11. Which types of accounts are specifically mentioned as examples of deposit accounts?
A) Investment and brokerage accounts
B) Credit and loan accounts
C) Tax and retirement accounts
D) Savings and current accounts
  • 12. What does the account balance represent from the bank's perspective?
A) The total profit earned by the bank
B) The physical cash stored in the vault
C) An amount owed by the bank to the customer
D) An amount owed by the customer to the bank
  • 13. What allows banks to pay interest on deposits?
A) Investing in the stock market
B) Earning interest on assets from lending
C) Charging customers for every transaction
D) Printing new banknotes
  • 14. In financial statements, the noun 'deposit' describes what?
A) The operational cost of the bank
B) The liability owed by the bank
C) The physical funds held by the bank
D) The profit made on loans
  • 15. How do banks effectively increase the money supply?
A) By recording loans as deposit liabilities
B) By reducing the interest paid on savings
C) By restricting withdrawals
D) By physically printing more currency
  • 16. Besides deposit insurance, what else may protect bank deposits?
A) Government guarantee scheme
B) Corporate tax breaks
C) Internal bank audits
D) Customer loyalty programs
  • 17. Which of the following is an example of a statutory regulation mentioned in the text?
A) Reserve requirements
B) Customer service standards
C) Marketing guidelines
D) Office hour regulations
Created with That Quiz — the math test generation site with resources for other subject areas.