Learning Aim A

Question 1

Account statement

Answer 1

A record of your activity over a specific period of time

Question 2

Unit of account

Answer 2

You exchange money for an equivalent value of goods

Question 3

Means of exchange

Answer 3

Buy, sell or exchange

Question 4

Store of value

Answer 4

It can be stored e.g banks

Question 5

Legal tender

Answer 5

National currency of a country an official method of payment

Question 6

Personal attitudes

Answer 6

Towards risk and rewards

Question 7

Life stages

Answer 7

Moving houses or made redundant

Question 8

Culture

Answer 8

Religious belief and ethical principles

Question 9

Life events

Answer 9

Moving house or made redundant

Question 10

External factors

Answer 10

State of economy or availability of jobs

Question 11

Good credit rating

Answer 11

Will be able to borrow money

Question 12

Advantages of planning expenditure

Answer 12

Not spending money on unnecessary goods
Means you are able to save money
Savings can be used to fund purchases and unexpected expenses

Question 13

Risks of not planning expenditure

Answer 13

Can get into debt
Have insufficient funds
Poor credit rating/ can affect your ability to borrow money
Legal action taken against you/ can lead to repossession
Not able to save in the future

Question 14

Something that is owned or due

Answer 14

Debt

Question 15

Costs

Answer 15

An amount to pay or buy or use a good service

Question 16

Repossession

Answer 16

To retake possession of something

Question 17

Insurance

Answer 17

An agreement providing guarantee of compensation for specific loss of damage

Question 18

Bankruptcy

Answer 18

Not having enough money to repay outstanding debts

Question 19

Credit rating

Answer 19

Estimate the ability of a person to fulfil their financial commitments

Question 20

Solvent

Answer 20

The ability to meet day by day expenditure

Question 21

Inflation

Answer 21

Price of goods is rising consequently the purchasing power of the currency is falling

Question 22

Cash

Answer 22

Used to exchange goods, debt or service

Question 23

Advantages of cash

Answer 23

Easier to budget your money
Doesn’t get you into debt

Question 24

Disadvantages of cash

Answer 24

Cash can be easily lost/stolen
May have an emergency but not enough cash to cover costs

Question 25

Cheques

Answer 25

An order to a bank to pay a stated sum from the drawers account

Question 26

Advantages of cheques

Answer 26

If cheques lost it doesn’t matter as the money won’t be lost Only the names recipient can receive the money

Question 27

Disadvantages of cheques

Answer 27

It takes three working days to transfer money Not many shops accept them It can easily be tempered with which leads to fraudulent payment transactions

Question 28

Debit card

Answer 28

A card that has your own money on

Question 29

Advantages of debit card

Answer 29

Don’t have to carry cash around If card is stolen nobody can use it without the pin Keeps your money safe

Question 30

Disadvantages

Answer 30

If you forget your pin you won’t be able to use the card Risk of the card holders overspending

Question 31

Credit card

Answer 31

It’s a card that has your money and you can borrow funds

Question 32

Inflation

Answer 32

The rise in general price level in an economy measured by CPI

Question 33

Credit card

Answer 33

A physical payment card that allows you to get credit from a financial institution

Question 34

Advantages of credit card

Answer 34

Can spread costs over period of time in instalments

Question 35

Disadvantages of credit cards

Answer 35

Limited use Extra fees Can get trapped in debt

Question 36

Cheque

Answer 36

Is an order to bank to pay a stated sum from the drawers account, written in a specially printed form

Question 37

Advantages of a cheque

Answer 37

Can be traced, if lost Can be drawn at any time Less risk of miscounting

Question 38

Disadvantages of a cheque

Answer 38

Are not legal tender and creditors may refuse to accept it Can be time consuming to process May be valueless of the drawer has no funds in their account