Accounting 251 Questions and Graded Answers.
Under FINRA rules, all of the following are necessary to open a corporate account EXCEPT:
a. corporate resolutions
b. corporate seal
c. corporate charter
d. corporate minutes - corporate minutes
In order to open a new account for an individual customer, which information is required on the
new account form?
I. date of birth
II. date of reaching legal maturity
III. social security number
IV. telephone number - date of birth
social security number
In order to open a new account for a customer, the customer's name, date of birth, address and
tax identification must be:
I. obtained prior to account opening
II. obtained within a reasonable time before or after account opening
III. independently verified prior to account opening
IV. independently verified within a reasonable time after account opening - obtained prior
to account opening
independently verified within a reasonable time after account opening
An officer of a trust wishes to open a margin account with your firm. This is allowed:
a. if the trust agreement specifically authorizes the opening of a margin account
b. as long as the new account form has been properly completed
,c. if an officer of the trust provides a letter of guarantee
d. only with the prior approval of the brand manager - if the trust agreement specifically
authorizes the opening of a margin account
Mr. Jones, a New York resident, is a widower with a 6 year old son. He opens an account for the
son under the Uniform Gifts to Minors Act. Three years later, Mr. Jones remarries, and moves to
California, a community property state. Under what conditions can Mrs. Jones enter orders into
the UGMA account?
a. only if a power of attorney is granted by the son
b. only if a power of attorney is granted by Mr. Jones
c. Mrs. Jones can enter orders without restriction because California is a community property
state
d. Mrs. Jones cannot enter orders into the account under any circumstances - Mrs. Jones
cannot enter orders into the account under any circumstances
To open an options account, the customer must be sent the Options Disclosure Document:
a. 15 days prior to opening the account
b. 5 days prior to opening the account
c. at or prior to opening the account
d. 15 days after opening the account - at or prior to opening the account
A customer wishes to give a gift of securities to her nephew under the Uniform Gifts to Minors
Act. The registration on a custodian account is:
a. one custodian agreement for one minor
b. up to two custodians for one minor
c. one custodian for up to two minors
d. any number of custodians for any number of minors - one custodian agreement for one
minor
Which of the following signatures must appear on the New Account Form when a customer is
opening a new cash account?
,I. Customer
II. Registered Representative
III. Manager or Principal - Registered Representative
Manager or Principal
Stock held in the custodian account is the subject of a rights offering. Which of the following
actions by the custodian are appropriate?
I. selling the rights and reinvesting proceeds
II. donating the funds required to exercise the rights
III. selling another security in the account and using the proceeds to exercise the rights
IV. letting the rights expire unexercised - selling the rights and reinvesting proceeds
donating the funds required to exercise the rights
selling another security in the account and using the proceeds to exercise the rights
The MSRB requires that if an employee of another municipal broker-dealer wishes to open an
account at your firm:
a. duplicate copies of each confirmation must be sent to the employer
b. duplicate copies of each confirmation must be sent to the MSRB
c. the employer must approve each trade before execution
d. the municipal principal must approve each trade before execution - duplicate copies of
each confirmation must be sent to the employer
A customer wishes to give a gift of securities to her nephew under the Uniform Gifts to Minors
Act. When the minor reaches legal age in that state, the:
a. custodian can continue in that capacity with the express permission of that minor
b. account must be transferred into the name of that minor
c. account must be liquidated and the proceeds paid to the new adult
d. custodian must pay the minor the highest market value that the account has had over its life -
account must be transferred into the name of that minor
, Under FINRA rules, a written power of attorney is NOT required for a registered representative
to choose which of the following order related items?
I. security to be traded
II. size of the order
III. price of execution
IV. time of execution - price of execution
time of execution
When opening an options account, the customer must return the signed options agreement:
a. 15 days prior to opening the account
b. 5 days prior to opening the account
c. at or prior to opening the account
d. 15 days after opening the account - 15 days after opening the account
Which TWO of teh following customer activities are indicators of potential money laundering?
I. excessive journal entry transactions between related accounts
II. excessive journal entry transactions between unrelated accounts
III. lack of concern regarding risks and commissions
IV. excessive concern regarding risks and commissions - excessive journal entry
transactions between unrelated accounts
lack of concern regarding risks and commissions
Under FINRA rules, a specific reason must be cited by a customer who requests in writing that
mail be held for more than:
a. one month
b. two months
c. three months
d. any length of time - three months
Under FINRA rules, all of the following are necessary to open a corporate account EXCEPT:
a. corporate resolutions
b. corporate seal
c. corporate charter
d. corporate minutes - corporate minutes
In order to open a new account for an individual customer, which information is required on the
new account form?
I. date of birth
II. date of reaching legal maturity
III. social security number
IV. telephone number - date of birth
social security number
In order to open a new account for a customer, the customer's name, date of birth, address and
tax identification must be:
I. obtained prior to account opening
II. obtained within a reasonable time before or after account opening
III. independently verified prior to account opening
IV. independently verified within a reasonable time after account opening - obtained prior
to account opening
independently verified within a reasonable time after account opening
An officer of a trust wishes to open a margin account with your firm. This is allowed:
a. if the trust agreement specifically authorizes the opening of a margin account
b. as long as the new account form has been properly completed
,c. if an officer of the trust provides a letter of guarantee
d. only with the prior approval of the brand manager - if the trust agreement specifically
authorizes the opening of a margin account
Mr. Jones, a New York resident, is a widower with a 6 year old son. He opens an account for the
son under the Uniform Gifts to Minors Act. Three years later, Mr. Jones remarries, and moves to
California, a community property state. Under what conditions can Mrs. Jones enter orders into
the UGMA account?
a. only if a power of attorney is granted by the son
b. only if a power of attorney is granted by Mr. Jones
c. Mrs. Jones can enter orders without restriction because California is a community property
state
d. Mrs. Jones cannot enter orders into the account under any circumstances - Mrs. Jones
cannot enter orders into the account under any circumstances
To open an options account, the customer must be sent the Options Disclosure Document:
a. 15 days prior to opening the account
b. 5 days prior to opening the account
c. at or prior to opening the account
d. 15 days after opening the account - at or prior to opening the account
A customer wishes to give a gift of securities to her nephew under the Uniform Gifts to Minors
Act. The registration on a custodian account is:
a. one custodian agreement for one minor
b. up to two custodians for one minor
c. one custodian for up to two minors
d. any number of custodians for any number of minors - one custodian agreement for one
minor
Which of the following signatures must appear on the New Account Form when a customer is
opening a new cash account?
,I. Customer
II. Registered Representative
III. Manager or Principal - Registered Representative
Manager or Principal
Stock held in the custodian account is the subject of a rights offering. Which of the following
actions by the custodian are appropriate?
I. selling the rights and reinvesting proceeds
II. donating the funds required to exercise the rights
III. selling another security in the account and using the proceeds to exercise the rights
IV. letting the rights expire unexercised - selling the rights and reinvesting proceeds
donating the funds required to exercise the rights
selling another security in the account and using the proceeds to exercise the rights
The MSRB requires that if an employee of another municipal broker-dealer wishes to open an
account at your firm:
a. duplicate copies of each confirmation must be sent to the employer
b. duplicate copies of each confirmation must be sent to the MSRB
c. the employer must approve each trade before execution
d. the municipal principal must approve each trade before execution - duplicate copies of
each confirmation must be sent to the employer
A customer wishes to give a gift of securities to her nephew under the Uniform Gifts to Minors
Act. When the minor reaches legal age in that state, the:
a. custodian can continue in that capacity with the express permission of that minor
b. account must be transferred into the name of that minor
c. account must be liquidated and the proceeds paid to the new adult
d. custodian must pay the minor the highest market value that the account has had over its life -
account must be transferred into the name of that minor
, Under FINRA rules, a written power of attorney is NOT required for a registered representative
to choose which of the following order related items?
I. security to be traded
II. size of the order
III. price of execution
IV. time of execution - price of execution
time of execution
When opening an options account, the customer must return the signed options agreement:
a. 15 days prior to opening the account
b. 5 days prior to opening the account
c. at or prior to opening the account
d. 15 days after opening the account - 15 days after opening the account
Which TWO of teh following customer activities are indicators of potential money laundering?
I. excessive journal entry transactions between related accounts
II. excessive journal entry transactions between unrelated accounts
III. lack of concern regarding risks and commissions
IV. excessive concern regarding risks and commissions - excessive journal entry
transactions between unrelated accounts
lack of concern regarding risks and commissions
Under FINRA rules, a specific reason must be cited by a customer who requests in writing that
mail be held for more than:
a. one month
b. two months
c. three months
d. any length of time - three months
