Topic 1 - Payment Methods Flashcards by Jas Stanley | Brainscape

Q

What is a drawer? (Cheques)

A

The company/person who is writing and sending the cheque

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Q

What is a drawee? (Cheques)

A

The bank who is processing the cheque

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Q

What is a payee? (Cheques)

A

The company/person who is receiving the money

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Q

If a balance is bought forward is that the opening or closing balance?

A

Opening balance

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Q

If a balance is carried forward is that an opening balance or closing balance?

A

Closing balance

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Q

Bank statements are from the banks perspective, if there is £100 in the account, would it be a debit or a credit from the banks perspective?

A

Credit because from the bank perspective they owe us this £100

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Q

Bank statements are from the banks perspective, if there is -£100 in the account, would it be a debit or a credit from the banks perspective?

A

Debit because from the bank’s perspective we owe this money back to the bank

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Q

When you pay in cash and fill in paying in slip… what must you do?

A

You must count how many of each coin and note you have and fill this in on the paying in slip

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Q

What is a counter credit?

A

A counter credit is when you pay in money in store at the bank

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Q

What must you do to set up a direct debit?

A

Fill in a direct debit mandate

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Q

What is a clearing system?

A

A clearing system is a system set up by major banks to derail with cheques

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Q

How long does it take for a BACS payment to be received by the recipient?

A

A few working days, but will leave the bank immediately

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Q

What affect does a cash withdrawal have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does a debit card have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does a direct debit have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does a standing order have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does a bank draft have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does a BACS/direct credit have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does a faster payment (FPS) have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does BACS have on the bank balance?

A

Reduces the bank balance immediately

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Q

What affect does CHAPS have on the bank balance?

A

Reduces the bank balance immediately

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Q

What does BACS stand for?

A

Bankers automated clearing service

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Q

What does CHAPS stand for?

A

Clearing house automated payment system m

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Q

What affect does a cheque have on the bank balance?

A

Reduces the bank balance at a later date, because it can take a few working days to clear

Q

What affect does a credit card have on the bank balance?

A

Reduced the bank balance at a later date when the amount is settled

Q

What affect does a cash withdrawal from a petty cash float or till float have on the bank balance?

A

No affect on the bank balance

Q

What affect does a dishonoured cheque have on the bank balance?

A

No affect in the bank balance because the cheque will have been refused either due to incorrect details or insufficient funds

Q

What affect does a cash deposit have on the bank balance?

A

Affect the bank balance at a later date

Q

What is an electronic payment?

A

The transfers between bank accounts

Q

What is a paying in slip?

A

A small piece of paper which is kept by us when depositing cash or cheques into the bank for our reference

Q

How long is a cheque valid for?

A

6 months

Q

Can cheques be post-dated? (Dated after the actual date the cheque was written)

A

Yes, but it can’t be cashed sooner than the date on the cheque

Q

What is the paying in sub/counterfoil?

A

A small piece of paper which is kept for our own records and our references from paying in a cheque

Q

Does a cheque have to be written in words and figures?

A

Yes, to avoid manipulation

Q

On the bank statements how will a cheque appear?

A

With their unique reference number which will match what is on the sub/counterfoil

Q

What is a standing order?

A

A regular payment of the same amount that’s paid on a specified date

Q

What is a direct debit?

A

Is a regular payment of a amount which can vary but is paid on a specified date

Q

What is a dishonoured cheque?

A

A cheque which has been refused by the bank usually for incorrect details or insufficient funds

Q

What is a bank draft?

A

A guaranteed form of cheque which is drawn by the bank and usually incurs a fee.
Also usually used for overseas

Q

What payment method would you use for overseas?

A

Bank draft

Q

What is CHAPS?

A

A guaranteed same day payment method, often used for high value purchases, like property/land
It can’t be cancelled and there is no minimum or maximum charge

Q

What payment method would you use for acquiring land/property?

A

CHAPS

Q

What is BACS?

A

Online payment for the variable regular payments to multiple payees
Can take 3 working days to process
Usually used for wages

Q

What payment method would you use for wages?

A

BACS

Q

What is a faster payment (FPS)?

A

A same day payment which isn’t guaranteed and is usually used for small to medium sized payments

Q

What does FPS stand for?

A

Faster payments

Q

What payment method would you use for a online purchase?

A

Debit card

Q

What payment method would you use for topping up petty cash?

A

Cash

Q

What payment method would you use for regular insurance?

A

Standing order

Q

What payment method would you use for phone bill with variable cost?

A

Direct debit

Q

What payment method would you use for a regular fixed amount cost?

A

Standing order

Q

What payment method would you use for a same day guaranteed payment?

A

CHAPS

Q

What payment method can you not cancel?

A

CHAPS

Q

What payment method can you not cancel?

A

CHAPS

Q

What payment method would you use for high value purchases?

A

CHAPS

Q

What payment method is guaranteed form of cheque?

A

Bank draft

Q

What payment method would you use for small to medium sized payments?

A

FPS/Faster payments

Q

What payment method would you use for settling an invoice?

A

BACS

Q

How long does it take for FPS/faster payment to clear?

A

Usually a few hours