Unit A Flashcards

(31 cards)

1
Q

What are the functions of money?

A

Unit of accounts
Means of exchange
Store of value
Legal tender

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2
Q

Ways to Pay

A

Cash,Debit card,Credit card,Cheque, Electronic Transfer,Direct debit, Standing order, Prepaid card, Contactless card, Charge card,Store card, Mobile banking, BAC’s, CHAPS

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3
Q

Cash advantages and disadvantges

A

Pros- Widely accpeted form of payment, Physical not virtual
Cons-Can be easily lost or stolen, Cannot be used online

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4
Q

Debit card advantages and disadvantages

A

Pros- No need to carry cash, Secure method of payment as less likely to be robbed
Cons-Short time lapse between transaction and money being withdrawn so could result in overspending, Not accepted for small transaction

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5
Q

Credit Card advantagess and disadvantages

A

Pros- Loyalty schemes are often offered, offers a degree of protection on payments
Cons-Interest is charged on balances not paid off within a month, Can encorage overspending and getting into debt

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6
Q

Cheque advantages and disadvantages

A

Pros- Low risk as can only be cashed in by person its adressed to
Cons- Time delay between writting and it being cahsed could result in consumer being overdrawn

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7
Q

What is a current account?

A

A current account is a type of bank account that allows for frequent transactions, including deposits and withdrawals.

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8
Q

True or False: Current accounts typically offer interest on deposits.

A

False: Current accounts usually offer little to no interest on deposits.

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9
Q

What is a primary advantage of a current account?

A

A primary advantage of a current account is its accessibility for day-to-day transactions.

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10
Q

Fill in the blank: Current accounts may have _______ fees associated with overdrafts.

A

monthly or transaction

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11
Q

Which type of current account typically has higher fees but offers additional services?

A

Premium current accounts

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12
Q

What is a standard current account?

A

A standard current account is a basic bank account that allows customers to deposit and withdraw money, make payments, and manage their finances without any restrictions.

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13
Q

True or False: A student current account typically offers lower fees and interest-free overdrafts.

A

True

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14
Q

Fill in the blank: A __________ current account is designed for individuals who frequently travel internationally and may require foreign currency transactions.

A

multi-currency

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15
Q

Which type of current account usually offers additional features like higher interest rates and premium services?

A

premium current account

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16
Q

What is one key benefit of a joint current account?

A

A joint current account allows two or more individuals to share access to funds and manage finances together.

17
Q

Purpose of accounting

A

Record transactions, Management of the business, Compliance, Measuring performance and Control of the business

18
Q

What is Capital Income

A

Money invested by the owners or other investors that is used to set up a buusiness or buy additional equipment

19
Q

Types of capital income

A

Loans, Mortagages, Shares, Owners Capital, Debentures

20
Q

Whats Revenue income

A

Money that comes into a business from performing its day to day functions - selling goods or providing a service

21
Q

Types of revenue income

A

Sales, Rent recieved, Commision recived, Interest paid and Discount recieved

22
Q

What is capital expenditure

A

Used to buy Capital items which are the assests that will stay in the business for a long period of time. Capital items are non- current assests and intangible assests.

23
Q

Whats Non-current assests

A

Items owned by a business for a reasonable period of time -such as land premises machinery and equipment, vehicles, fixtures and fittings

24
Q

Whats an intangible?

A

Assest that is owned by the business that cannot be touched but adds value to a business- such as Goodwill(such as buying an existing business as its name and reputation is already known), Patents (legal protection of an invention), Trademarks or brandname

25
Whats the Revenue expenditure?
spending items on day to day or regualar basis such as Inventory,Rent, Rates, Heating and lighting, Water,Insurance, Salaries
26
27
Whats an internal source of finance
Retained profit, Net current assests, sale of assests
28
Pros and cons of Retained profit
Pros- No interest is charged, avaliable immediately Cons- Amount avaliable may be limited, Reduces payments to shareholders
29
Pros and cons of Net current assests
Current assests minus current liabilties Pros- Encourages the business to manage cash flow Cons- can put pressure on customers as shorter credit terms are offered and this negatively affects realtionships withh suppliers if longer crefit terms are negotiated
30
Pros and Cons of Sales of assests
Pros- no interest charged Cons- Likely that the amount recieved isnt a true reflection of the value of the assest
31
What is an External source of finance
Money avaiable from outside a business Example Owners capital, Loans, Crownfunding, Mortages, Venture capital