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LAW > Business and Personal Finance > Flashcards

Business and Personal Finance Flashcards

1
Q

What are the four functions of money?

A
  • unit of account - goods and services
  • means of exchange- allows people to trade
  • store of value- keeping a specific item for its value
  • legal tender- form of payment
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2
Q

what are a few ways to pay?

A
  • cash
  • debit card
  • cheque
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3
Q

what is an advantage of using cash?

A

widely accepted and its a physical form of payment

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4
Q

what is an advantage using debit card?

A

no need to carry lots of cash and its a secure payment method

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5
Q

what is an advantage of using a cheque?

A

can only be checked out from the name its given too

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6
Q

What is a disadvantage of using cash?

A

can easily get stolen and cannot be used online

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7
Q

What is a disadvantage of using debit card?

A

not accepted for small purchases in specific stores

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8
Q

What is a disadvantage of using a cheque?

A

easy for the consumer to create mistakes

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9
Q

what are the four types of current accounts?

A
  • standard account
  • premium account
  • student account
  • basic account
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10
Q

what are the advantages of a standard account?

A
  • convenient for regular payments
  • offers a wide range of facilities
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11
Q

what are the advantages of a premium account?

A
  • has extra perks
  • no charges on credit balances
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12
Q

what are the advantages of a basic account?

A
  • free to open
  • provides basic features
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13
Q

what are the advantages of a student account?

A
  • free to open
  • provides different offers to students
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14
Q

what are the disadvantages of a standard account?

A
  • does not have any extra features
  • bank charges can be expensive
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15
Q

what are the disadvantages of a premium account?

A
  • charges extra
    could still face bank charges
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16
Q

what are the disadvantages of a basic account?

A
  • restricted features
  • no overdraft
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17
Q

what are the disadvantages of a student account?

A

-only for students
- high charges once account converts

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18
Q

what is an overdraft?

A

money you borrow from the bank in which you pay back with interest?

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19
Q

what is an advantage of overdraft?

A
  • quick to arrange
    -you can only borrow money when you need it
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20
Q

what’s a personal loan?

A

borrowing money from the bank which you pay back over a long period time with interest.

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21
Q

what are the advantages of a personal loan?

A
  • fixed interest
  • quick availability
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22
Q

what are the disadvantages of a personal loan?

A
  • need to have a good credit rating
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23
Q

What is a hire purchase?

A

loan for specific items, such as a phone paying monthly, which will last a certain time frame

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24
Q

what is an advantage of a hire purchase?

A
  • being able to buy an expensive item for a long period of time
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25
Q

what is a disadvantage of a hire purchase?

A

as you are in a contract having issues will cause complications

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26
Q

what is a mortgage?

A

long term borrow for a property

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27
Q

what is an advantage of a mortgage?

A

makes home ownership more affordable

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28
Q

what is an disadvantage of a mortgage?

A

pay arrangement fees to set up a mortgage

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29
Q

what is a credit card?

A

short term borrowing with there’s a limited set of money which you pay back with interest.

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30
Q

what is an advantage of using a credit card?

A
  • safer to carry than cash
  • build a positive credit score
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31
Q

what is a payday loan?

A

short term borrowing from the bank which you pay back with interest

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32
Q

what is an advantage of a payday loan?

A
  • quick and easy to apply for
  • available to everyone 18 +
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33
Q

what is a disadvantage of a payday loan?

A
  • only lends a small amount of money
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34
Q

what is an ISA? (Individual Savings Account)

A

different to a standard savings account, as it is tax free.

35
Q

what is an advantage of an ISA?

A

no tax paid on divided income

36
Q

what is a disadvantage for an ISA?

A

not flexible

37
Q

what is premium bonds?

A

product that is offered by NS&I which you withdraw money and cash in your ‘bonds’

38
Q

what is bonds and gilts?

A

type of lending which happens over a period of time in return for a fixed rate of interest

39
Q

what is an advantage of bonds and gilts?

A

its a safe and sound investment

40
Q

what is an disadvantage of bonds and gilts?

A

Inflation can reduce the value of the interest payments and principal of a bond

41
Q

what is a pension?

A

saving scheme, with the aim of cashing this in when you get to the retirement age

42
Q

what is car insurance?

A

provides protection if something was to happen to your car

43
Q

what is home insurance?

A

provides protection if something was to happen to your home

44
Q

what is life insurance?

A

provides protection if anything was to happen to your life (against the risk death)

45
Q

what is travel insurance?

A

provides protection linked to travelling eg lost luggage

46
Q

what is pet insurance?

A

provides protection which are linked to the pet

47
Q

what is health insurance?

A

provides protection linked to customers health

48
Q

what are the advantages of insurance?

A
  • provides stability and confidence
  • provides guidance and legal expertise
49
Q

what is the aim of Financial Conduct Authority?

A

to make sure that financial markets work well so consumers get fair deals/ treated fairly

50
Q

what is the aim of Financial Ombudsmen Service?

A

where customers can contact them if they have a complaint to make against their bank or firm

51
Q

Financial Services Compensation Scheme?

A

pay compensation to customers if a firm is unable to

52
Q

What is Office of Fair Trading?

A

responsible for protecting consumer interests throughout the UK

53
Q

what are the different ways to communicate with customers?

A
  • Branch
  • Online
  • Telephone
  • Mobile
  • Postal
54
Q

what is an advantage of using the Branch?

A

offers personal services so customers feel more assured

55
Q

what is an advantage of using a online way to contact customers?

A
  • quick and easy
56
Q

what is an advantage of using the telephone to contact customers?

A

available to those who cannot access other methods

57
Q

what is an advantage of using a mobile to contact customers?

A

quick and easy and offers instant data

58
Q

what is an advantage of using postal to contact customers?

A

physical form of banking

59
Q

what is a disadvantage of using branch to contact customers?

A
  • time consuming and having to travel
60
Q

what is a disadvantage of using online ways to contact customers?

A
  • security issues and less personal
61
Q

what is a disadvantage of using telephone to contact customers?

A

slower and limited ranges of features

62
Q

what is a disadvantage of using mobile to contact customers?

A

limited services

63
Q

what is a disadvantage of using postal to contact customers?

A

slow

64
Q

what are the features of the Bank of England?

A
  • prints bank notes
  • controls inflation
  • ensures stability
65
Q

what are the features of the bank?

A

offers a safe and secure place to keep items of value

66
Q

what are the features of building societies?

A

places where money will change hands

67
Q

what are the features for insurance companies?

A

organisation that provides protection in the form of compensation

68
Q

what are the features of pension companies?

A

organisation that provides a financial service in the form a pension that customers can save towards retirement

69
Q

what are the features of pawnbrokers?

A

organisation that provides loans against items that have been offered up in the form of security

70
Q

what are the features of payday loans?

A

provides loans for a staff period of time to cover unexpected

71
Q

what are direct costs?

A

costs that are directly linked to the making of a product

72
Q

what are indirect costs?

A

the costs that are not directly linked to the making of a product

73
Q

what is revenue?

A

all the money that is going into sources of revenue

74
Q

what are fixed costs?

A

costs that do not change with use eg rent, salaries

75
Q

what are variable costs?

A

costs that change within use eg stock

76
Q

what is break even?

A

point where you make no profit or loss

77
Q

what is margin of safety?

A

how well a business is performing compared to its break even point

78
Q

what are assets?

A

items which a business owns

79
Q

what is depreciation?

A

reduction in the value of an asset over a period of time

80
Q

what are the causes of depreciation?

A

age and use

81
Q

what is income?

A

money going into the business

82
Q

what is revenue income?

A

income that is related to the day to day trading of the organisation

83
Q
A

LAW (5 decks)

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