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Bellevue University MBA 620 Quiz 6 1)All of the following payment instruments have check-like attributes and typically clear through the same channels as checks, EXCEPT which one? a

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Bellevue University

MBA 620

Quiz 6

1)All of the following payment instruments have check-like attributes and typically clear through the same channels as checks, EXCEPT which one?

a.            Banker’s Acceptance

b.            Payable Through Draft

c.             Money Order

d.            Government Warrant

e.            Sight Draft.

 

2.            Which of the following describes the basic advantage to a firm of using a traditional check/mail based lockbox system?

a.            Increased mail and processing float b. Reduced mail and processing float

c.             Reduced payment float

d.            Reduced access to remittance information

e.            Both b & c

f.             None of the above.

 

3.            A bank service that matches data regarding checks issued by a firm to the actual checks presented to the firm's bank for final payment is

a.            negative pay

b.            affirmative pay

c.             restrictive pay

d.            check pay e. positive pay

f.             illegal

 

4.            All of the following are non-cash payment systems, EXCEPT which one?

a.            checks or drafts

b.            RTGS

c.             low-value electronic payments

d.            card-based payments

e.            None of the above, i.e. ALL of the above ARE non-cash payment systems in the U.S.

 

5.            Geographical proximity should be taken into consideration when setting up all of the following collection systems, except which one?

a.            over-the-counter collection

b.            Fedwire transfer collection

c.             mailed payment collections

d.            lockbox collection system

6.            Firms may have a disbursement account on which the firm regularly writes checks, even though the balance in the account is maintained at zero at the end of each day.

a.            False, because this does not make sense

b.            False, because the firm would pay too much in NSF (Not Sufficient Funds) fees

c.             True, because funds could be automatically transferred into the account as needed.

 

d.            True, because the NSF fees are offset by the zero balance benefit

e.            None of the above

 

7.            In a traditional paper check based payment system, the paper check would be an example of a

a.            credit type transfer, since the payer is pushing funds (credit) to the payee’s account

b.            credit type transfer, since the payer is authorizing the payee to initiate the value transfer via the check

c.             debit type transfer, since the payer is pushing funds (credit) to the payee’s account

d.            debit type transfer, since the payer is authorizing the payee to initiate the value transfer via the check

e.            any of the above, depending upon whether the payee cashes the check or simply deposits it

8.            In general, funds availability in the check settlement process when depositing a check

depends on which of the following

a.            paying bank’s location (endpoint)

b.            time of deposit relative to the depository bank’s deposit deadline

c.             day of week the check is deposited

d.            the bank’s availability schedule e. all of the above

9.            Which of the following represent a potential advantage of using a lockbox collection system?

a.            Reduced mail and processing float

b.            Improved access to remittance information

c.             Improved control and record-keeping capabilities

d.            Scalability

e.            All of the above are generally advantages of a lockbox system.

 

10.          Which of the following payment systems would be most commonly used for high-value

(dollar), real time, low volume transactions?

a.            checks and other paper based instruments

b.            cash

c.             credit cards

d.            ACH e. Fedwire