What is the acknowledgment by a bank of a receipt of money with an agreement of repayment called?

What is the acknowledgment by a bank of a receipt of money with an agreement of repayment called?

• A. Bond
• B. Certificate of deposit
• C. Loan agreement
• D. Deposit slip

Answer: (B)

The terminology related to banking and finance often defines specific instruments used for various transactions. The correct choice, which refers to the acknowledgment by a bank of a receipt of money with an agreement of repayment, is a certificate of deposit. A certificate of deposit (CD) is a financial product offered by banks and credit unions that allows individuals to deposit money for a fixed term at a specified interest rate. When you invest in a CD, the bank acknowledges the deposit, and in return, it agrees to pay back that amount with interest at the end of the term. This creates a formal agreement for repayment, differentiating it from other financial instruments. The other options serve different purposes. A bond represents a loan made by an investor to a borrower (typically corporate or governmental) and is not a direct acknowledgment of receipt of money by a bank. A loan agreement typically outlines the terms and conditions of a loan made from a lender to a borrower, not a deposit. A deposit slip is simply a document used to provide information to a bank when depositing cash or checks and does not, by itself, constitute an acknowledgment of a financial agreement regarding repayment. Thus, the certificate of deposit accurately encompasses the definition of an acknowledgment by a bank of a receipt of money with an

The terminology related to banking and finance often defines specific instruments used for various transactions. The correct choice, which refers to the acknowledgment by a bank of a receipt of money with an agreement of repayment, is a certificate of deposit.

A certificate of deposit (CD) is a financial product offered by banks and credit unions that allows individuals to deposit money for a fixed term at a specified interest rate. When you invest in a CD, the bank acknowledges the deposit, and in return, it agrees to pay back that amount with interest at the end of the term. This creates a formal agreement for repayment, differentiating it from other financial instruments.

The other options serve different purposes. A bond represents a loan made by an investor to a borrower (typically corporate or governmental) and is not a direct acknowledgment of receipt of money by a bank. A loan agreement typically outlines the terms and conditions of a loan made from a lender to a borrower, not a deposit. A deposit slip is simply a document used to provide information to a bank when depositing cash or checks and does not, by itself, constitute an acknowledgment of a financial agreement regarding repayment. Thus, the certificate of deposit accurately encompasses the definition of an acknowledgment by a bank of a receipt of money with an