International Association of Accessibility Professionals (IAAP) Certified Administrative Professional (CAP) Practice Exam

What does the term "withdrawal" refer to in a financial context?

1. Act of depositing funds into an account

2. Act of taking money out of an account

3. Accruing interest over time

4. Transferring funds between accounts

The correct answer is: Act of taking money out of an account

In a financial context, the term "withdrawal" specifically refers to the act of taking money out of an account. This process can involve cash transactions at a bank or financial institution, where an individual or entity removes funds from their savings, checking, or other types of accounts. The withdrawal reduces the account balance, reflecting the fact that money has been taken out for personal use or other purposes. The other options represent different financial activities, such as depositing funds into an account, which increases the balance; accruing interest over time, which relates to the earnings generated by the balance in an account; and transferring funds between accounts, which involves moving money from one account to another without affecting the total funds available. However, these actions do not capture the essence of a withdrawal, which is distinctly about taking funds out of an account.