Multiple Choice
Which type of accounting is primarily concerned with recording and reporting a company's investments, such as stocks, bonds, and other financial assets?
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1. Introduction to Accounting
Types of Accounting
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1. Which type of bank account allows a depositor to order payments, such as writing checks, directly from the account? (p. 123)
A
Money market account
B
Certificate of deposit
C
Savings account
D
Checking account
Verified step by step guidance1
Understand the concept of a checking account: A checking account is a type of bank account that allows the depositor to access funds directly for payments, such as writing checks or using a debit card. It is designed for frequent transactions.
Compare the features of other types of accounts: Money market accounts, certificates of deposit (CDs), and savings accounts typically have restrictions on withdrawals or transactions and are not designed for direct payments like checks.
Identify the key feature of a checking account: The ability to order payments directly from the account, such as writing checks, is unique to checking accounts.
Review the problem statement: The question specifically asks for the type of account that allows ordering payments directly, which aligns with the definition of a checking account.
Confirm the correct answer: Based on the explanation and comparison, the correct answer is 'Checking account.'
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