Future Business Leaders of America (FBLA) Securities and Investments Practice Test

What term is used for securities maintained as a computer record in lieu of physical certificates?

1. Bearer bonds

2. Book/journal entry

3. Registered bonds

4. Municipal bonds

The correct answer is: Book/journal entry

The term used for securities maintained as a computer record instead of in physical certificate form is "book/journal entry." This method streamlines the process of ownership tracking and transfer, as it eliminates the need for physical handling of securities, thereby reducing the risk of loss or theft associated with physical certificates. In modern finance, much of the trading and holding of securities is done electronically, allowing for quicker transactions and easier management of investments. Other terms listed, such as bearer bonds, refer to specific types of bonds that are unregistered and payable to the holder, while registered bonds are issued in the name of the owner and require the owner's information for any transactions. Municipal bonds are debt securities issued by local government entities to fund public projects and do not specifically relate to how records are maintained.