Banking Flashcards
What are the 3 parties involved in cheques?
- Drawee
- Payee
- Drawer
Who is the drawee?
-the bank who has issued the cheque
Who is the payee?
-the person being paid
Who is the drawer?
-the person writing and signing the cheque
Difference between standing order and direct debit?
-standing = fixed on regular basis
-direct = amounts of money vary each month
What is BACS?
-payment between banks
What is CHAPS?
-one off high value payments bank to bank
What is a faster payments?
-payment sent within 2 hours
What is a bank draft?
-non cancellable cheque
-usually high value
What documents need to be held for at least 6 years?
-cheque book stubs
-paying in slip stubs
-bank statements
-standing order + direct debit
-BACS + CHAPS instructions
What facilities are offered by banks and building societies?
-loans
-mortgages
-overdraft
-foreign currency
-safe custody boxes
What facilities may not be offered by banks?
-overdraft
-safe custody
What are 3 other pieces of financial statements that need to be kept?
-invoices
-VAT records
-details of assets and liabilities
Why does it take time for a cheque to clear?
-there is a timing difference due to the bank’s clearing system
What items would appear on the P&L?
-motor expenses
-stationery
-sales
-purchases
-bank interest received
