2 mark questions and Answers Flashcards
Give two functions of money.
unit of account store/unit/measure of value Legal tender pay for goods and services means of exchange
Explain two disadvantages to the consumer of using pre-paid cards.
some cards have maximum amounts which can be loaded onto the card,which limits its use.
can be expensive because different fees associated with getting and using the card.
less protection than credit cards because prepaid cards are not covered by Consumer Credit Act.
State two types of payment card.
Debit card
Credit card
store card
State two types of intangible non-current asset that a business could have.
Goodwill/customer loyalty Patents Copyrights Trademarks Brand name
State two effects that a ‘discount allowed’ being offered to customers will have on the accounts of a business.
increase expenses
Reduces net profit for the year
improves cash flow
State two disadvantages to the holder of using Premium Bonds as a form of saving and investment.
little chance of winning the top prizes
No interest earned
No guaranteed return
minimum purchase amount is £100
State two advantages to the consumer of using the Financial Ombudsman Service (FOS) for support in a complaint against a financial organisation.
Free to use
Unbiased/impartial
Expert/professional / trained advisors
Outline what is meant by the term ‘drawings’ in a financial document.
Assets/money which are taken out of a company by its owners for personal use .
Outline what is meant by ‘capital income’.
The amount of money invested in the business and appears in the statement of financial position.
Income generated by an asset over time and will not directly affect profit
Outline what a ‘semi-variable cost’ is.
costs that are composed of a mixture of fixed and variable components
Costs such as electricity have a standing charge and a charge per unit used.
Identify two types of revenue income for a small business.
cash/ credit sales rent received commission received interest received discount received
Identify two sources of advice and guidance about personal finance.
citizens advice
independent financial advisers
Money Advice Service
Financial Ombudsmen Service
Identify two inflows which could be recorded in a cash flow forecast.
cash/credit sales Loans Capital introduced Grant Bank interest received
Identify two features of travel insurance.
covers holiday cancellation
covers loss/theft of belongings
protects individuals or groups
can be used for single/annual/multi trips
Identify two features of a debenture.
Fixed repayments
Interest id charged
repayment date is specified
can be secured against non current assets
