Chapter 9 - Making Payments Flashcards
What is endorsing a cheque?
When the payee passes the right to the cheque to another party by signing their name on the back of the cheque.
What is crossing a cheque?
Drawing two parallel lines across the face of a cheque in order to make it safer.
What is a postdated cheque?
A cheque that has a date on it that is sometime in the future.
What is an antedated cheque?
A cheque that contains a date that is sometime in the past.
What does EFTPOS mean?
Electronic Funds Transfer at Point of Sale is the use of Laser Cards and Smart Cards (but NOT debit cards) to pay. For goods and services.
What is a cheque?
A written instruction from your bank to pay a sum of money from your current account to another person.
What is a stale cheque?
A cheque that is more then 6 months old and therefore is worthless.
What is paypath?
The electronic transfer of wages, by an employer, directly from their bank account into the employees.
Who are the parties of a cheque?
- Drawer - Person who writes the cheque
- Payee - Person whom the money is being paid
- Drawee - The bank of the person writing the cheque
Name 3 ways to pay a for goods and services in foreign countries.
- Travellers cheques
- Foreign currency’s notes & coins
- Credit cards
What is direct debit?
An electronic method of making payments. Permission is granted, by an a pound holder, to a person or business to request variable amounts of money to be paid out of your bank account to their bank account on a regular basis. For paying bills where amount varies e.g. EBS bills.
What is standing order?
An electronic method of making payments. An account holder tells their bank to pay a fixed amount of money from their bank account to another bank account on a regular basis. For paying bills where amount stays the same e.g. Rent
What is a credit transfer?
An electronic method of making payments. Money is transferred from ones bank account directly into another’s bank account. Each time a person wishes to transfer money another credit transfer must occur.
Name 5 advantages of paypath.
- Safer for the employee as they are not carrying around cash
- More convenient as employees don’t have to cash the cheque
- Lest costly for employers as transfer happens automatically
- Advantageous for banks as employees have to open an account.
- Saves time for the bank as they don’t have to process their cheques.
