QUESTION As your firm’s controller, you review an invoice that says “2/10, Net 30.” What does that mean? What will be an ideal response? ANSWER Answer: When an invoice says “2/10, Net 30,” that means that the buyer can take a 2% discount for paying the bill within 10 days, but in any case […]
Date: September 3rd, 2020
QUESTION What are the nondeposit institutions that provide retirement benefits to workers and their families called? A) insurance companies B) pension funds C) finance companies D) brokerage firms E) money market firms ANSWER Answer: B Explanation: B) Pension funds are nondeposit institutions that provide retirement benefits to workers and their families.
Date: September 3rd, 2020
QUESTION How do lenders make money? What will be an ideal response? ANSWER Answer: The main way lenders make money is by charging interest on their loans. Explanation: Lenders make money by charging interest on their loans.
Date: September 3rd, 2020
QUESTION What is the process called that insurance companies use to decide who should be insured? A) underwriting B) evaluating C) financing D) insuring E) accounting ANSWER Answer: A Explanation: A) The process that insurance companies use to determine who should be insured is called underwriting.
Date: September 3rd, 2020
QUESTION What are the three types of loans available from commercial finance companies? What will be an ideal response? ANSWER Answer: The three types of loans available from commercial finance companies are lines of credit, revolving credit agreements, and transaction loans. Explanation: The three types of loans available from commercial finance companies are lines […]
Date: September 3rd, 2020
QUESTION Which of the following is an example of a nonbank? A) finance company B) savings and loan C) mutual savings D) commercial E) credit union ANSWER Answer: A Explanation: A) Nonbanks are financial institutions—insurance companies, pension funds, finance companies, and brokerage firms—that offer many of the same services banks provide.
Date: September 3rd, 2020
QUESTION Would it be considered a barter if Sheila, a personal chef, cooked a five-course dinner for friends and, since they were friends, charged them half what she usually charges? What will be an ideal response? ANSWER Answer: This would not be considered a barter because Sheila would still be compensated with money, not […]
Date: September 3rd, 2020
QUESTION For which types of banks does the NCUA provide insurance coverage? A) federal banks B) savings and loans C) local banks D) investment banks E) credit unions ANSWER Answer: E Explanation: E) The NCUA (National Credit Union Administration) provides insurance coverage for credit union accounts.
Date: September 3rd, 2020
QUESTION What is one difference between savings and loan associations and mutual savings banks? A) Only savings and loan associations make loans for home mortgages. B) Only mutual savings banks have recently ventured into life insurance and mutual funds. C) Mutual savings banks are owned by their depositors, rather than by shareholders. D) Only mutual […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT among those who are protecting your money in banks? A) Federal Deposit Insurance Corporation B) Savings Association Insurance Fund C) National Credit Union Administration D) New York Stock Exchange E) Federal Reserve ANSWER Answer: D Explanation: D) The three major sources of government banking deposit protection are […]
Date: September 3rd, 2020
