Banks Prefer That Customers Use an Electronic Funds Transfer System

question 244

Multiple Choice

Banks prefer that customers use an electronic funds transfer system rather than traditional methods of payment because

• A) traditional payments are subject to regulation by the Fed and electronic transactions are not.
• B) electronic funds are subject to a smaller reserve requirement than traditional funds.
• C) electronic funds transfer is more efficient and less expensive for banks than traditional check-based payments.
• D) the bank generates advertising revenue from its website.

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Definitions:

Equipment

Tangible assets used in operations, such as machinery and computers, that have a useful life beyond one year.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of shareholders or owners.

Balance Sheet

A balance sheet is a financial statement that reports a company’s assets, liabilities, and shareholders' equity at a specific point in time, offering a basis for computing rates of return and evaluating its capital structure.

Assets

Resources owned or controlled by a business or an individual that are expected to produce future economic value.