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AMA Ch-19

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					AMA Ch-19

Multiple Choice
Highlight the choice that best completes the statement or answers the question.

____    1. Which of the following is not an example of a negotiable instrument?
           a. cashier’s check                         c. credit card
           b. money order                             d. personal check
____    2. What is the most common reason why the ending balances in checkbooks and bank statements
             usually don’t match?
             a. transactions are made between the preparation and receipt of the statement
             b. it is common to make errors when recording checks and deposits in the checkbook
             c. banks often make mistakes in the preparation of statements
             d. patients have written bad checks
____    3.   Which type of bank account would be best for maintaining funds that are used for paying monthly
             expenses, such as the rent?
             a. regular savings
             b. money market savings
             c. interest-bearing checking that requires a high minimum balance
             d. regular checking
____    4.   If you are not using a pegboard check-writing system, what is the first thing you must do when
             writing a check?
             a. enter the payee’s name on the check
             b. date the check correctly
             c. fill in the check stub
             d. write the exact amount to be paid on the check
____    5.   What is represented by the number in the “balance forward” box on the check stub?
             a. the amount of the check to be written
             b. the amount you have in the account before writing the check
             c. the amount you have remaining in the account after writing the check
             d. the total deposits made since the last check was written
____    6.   If you make a mistake when writing a check, the best practice is to:
             a. write “void” on it and file with canceled checks
             b. destroy it immediately
             c. cross out the error and write in the correction
             d. erase the error and write in the correction
____    7.   In which situation should you request the bank to issue a stop-payment order on a check that you
             wrote in payment for a medical supply order?
             a. the check was accidentally written for more than was owed
             b. the payment did not reach the payee within a reasonable amount of time
             c. the vendor to whom you wrote the check refuses to deliver your order
             d. all of the above
____    8.   Why is it usually poor policy to accept third-party checks from patients?
             a. you cannot verify the reliability of the maker
             b. your bank may not accept them for deposit
             c. you cannot verify the reliability of the endorser
             d. all of the above
____    9. If a bank cashes a check that is later returned for insufficient funds, whom does it charge to recover
             the amount lost?
             a. the check’s maker
             b. the person who received the money
             c. the person to whom the check was written
             d. the person who last endorsed the check
____ 10.     When should you deposit checks received from patients and other sources?
             a. at the same time you pay the bills
             b. as soon as possible after you receive them
             c. when you reconcile the bank statement each month
             d. at the end of every week
____ 11.     The amount of the interest earned on the checking account is _____ the balance in the checkbook.
             a. added to                                 b. subtracted from
____ 12.     The amount of a returned check that was deposited into the checking account is _____ the balance in
             the checkbook.
             a. added to                                 b. subtracted from
____ 13.     The amount of the service charges for the checking account is _____ the balance in the checkbook.
             a. added to                                 b. subtracted from
____ 14.     The amount of the bank drafts from the checking account is _____ the balance in the checkbook.
             a. added to                                 b. subtracted from
____ 15.     The amount of the fee for printed checks for the checking account is _____ the balance in the
             checkbook.
             a. added to                                 b. subtracted from
AMA Ch-19
Answer Section

MULTIPLE CHOICE

        1.   ANS:   C
        2.   ANS:   A
        3.   ANS:   C
        4.   ANS:   C
        5.   ANS:   B
        6.   ANS:   A
        7.   ANS:   D
        8.   ANS:   D
        9.   ANS:   D
       10.   ANS:   B
       11.   ANS:   A
       12.   ANS:   B
       13.   ANS:   B
       14.   ANS:   B
       15.   ANS:   B

				
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