Chapter 9 - Making Payments

Question 1

What information does the cheque counterfoil contain?

Answer 1

• Amount of money
• Date
• Name

Question 2

What are the three parties to a cheque?

Answer 2

• Drawer
• Payee
• Drawee

Question 3

Drawer

Answer 3

Person who writes the check - the account holder

Question 4

Payee

Answer 4

The person we want to pay the money to

Question 5

Drawee

Answer 5

The bank where we have our account

Question 6

Cheque

Answer 6

A written instruction to your bank to pay a sum of money to another person from your current account

Question 7

What do you call a cheque that is more than six months old?

Answer 7

Stale cheque

Question 8

Dishonoured cheque

Answer 8

A cheque the bank refused to cash because there isn’t enough money in the account

Question 9

Why would you cross a cheque?

Answer 9

To avoid the check being cached by someone other than it was intended for you should always cross the cheque

Question 10

What happens to a cross to check?

Answer 10

A crossed cheque must be lodged into the bank account and stay there for at least three days before it can be turned into cash

Question 11

Name the three types of cheques

Answer 11

◾️Postdated cheque
◾️Antedated cheque
◾️Blank cheque

Question 12

Postdated cheque

Answer 12

A cheque that has a date sometime in the future. It cannot be cashed until this date has been reached

Question 13

Antedated cheque

Answer 13

This is a cheque that contains a date sometime in the past. A cheque must be cashed within six months of the date on the cheque

Question 14

Blank cheque

Answer 14

This is a signed cheque that has some relevant piece of information omitted

Question 15

What is a debit card?

Answer 15

Electronic payment card that allows a current account holder to withdraw money from their account and to pay for goods without having to use a cheque or cash

Question 16

What are the advantages of a debit card?

Answer 16

🔺Convenient and safe 
🔺You can control your spending 
🔺It can be used in most types of retail outlets
🔺Cheaper than writing cheques
🔺Can be used to pay for goods online

Question 17

What is a credit card?

Answer 17

It can be used to pay for goods and services. However, when using a credit card, you are not spending your money, you are spending the credit card company’s money

Question 18

What is a smart card?

Answer 18

This is similar to Laser or credit cards, however the magnetic strip also contains a memory that can be loaded with money from your account

Question 19

What is direct debit?

Answer 19

Where is you allow a person or a business to request an amount of money to be paid out of your bank account and into theirs on a regular basis

Question 20

What would you use direct debit for?

Answer 20

For paying bills where the amount is different every time, for example telephone bills

Question 21

What is standing order?

Answer 21

Where you tell your bank to pay a certain amount of money from your account to another on a regular basis. The amount remains the same each time

Question 22

What is standing order useful for?

Answer 22

Standing order is useful if you want to pay the same amount of money to another person or business, for example, €10 each month to your favourite charity

Question 23

What is credit transfer?

Answer 23

This is a way of paying bills by transferring money from your bank account directly into another bank account.

Question 24

What is a bank draft?

Answer 24

It is used as a convenient way of paying for expensive purchases like a car costing €10,000. Instead of carrying €10,000 cash down to the garage or giving the garage a cheque, the customer buys a draft from the bank and hands over €10,000. They give the draft to the garage and the garage is guaranteed to get paid as the bank has already received the money

Question 25

What is paypath?

Answer 25

Employers can use this to transfer their in employees wages directly into their bank account each week or each month

Question 26

How is paypath an advantage to the employee?

Answer 26

➡️Safer

➡️More convenient

Question 27

How is paypath an advantage to the employer?

Answer 27

💛Safer
💛Less costly
💛Involves less work

Question 28

How is paypath an advantage to the bank?

Answer 28

👣Encourages employees to open bank accounts

👣Involves less work

Question 29

What does EFTPOS stand for?

Answer 29

Electronic funds transfer at point of sale (debit cards, credit cards, smartcards) 😂🐯✉️📱