Future Business Leaders of America (FBLA) Accounting Practice Test

Who is referred to as a depositor?

1. A person who writes checks against their account

2. A business that manages cash transactions

3. A person or business with cash on deposit in a bank

4. A bank employee who oversees accounts

The correct answer is: A person or business with cash on deposit in a bank

The term "depositor" specifically refers to a person or business that has cash deposited in a bank. This relationship is fundamental to banking, as depositors provide the banks with the funds necessary to operate. When a person or business deposits money into a financial institution, they establish a connection where the bank holds the funds on their behalf, typically in various types of accounts such as savings or checking accounts. A depositor can make withdrawals, transfer funds, and sometimes earn interest on their deposits, depending on the account type. In contrast, the other roles described do not encompass the definition of a depositor. For instance, someone who writes checks is merely utilizing their account; they may not necessarily be defining their role in the banking relationship. A business managing cash transactions could involve a variety of financial activities but doesn't directly relate to possessing deposits in the bank. Additionally, a bank employee supervising accounts does not represent the action of holding cash in a bank; rather, they are part of the institution's structure focused on customer accounts and service. Hence, the correct identification of a depositor is clearly outlined as someone who has funds on deposit at a financial institution.