Instrument of exchange / payment

Question 1

Bills of exchange

Answer 1

A written order sent from one person to another, instructing them to pay a certain amount at a specific date, for goods or services received.

Question 2

Electronic transfer

Answer 2

This is a transaction that takes place over a computerized network, either among accounts at the same bank or to different accounts at separate financial institutions.

Question 3

Tele banking

Answer 3

Telephone banking is a service provided by a bank or other financial institution, that enables customers to perform over a range of financial transactions, without visiting a bank branch.

Question 4

E-commerce

Answer 4

This is the activity of buying or selling products online or over the internet.

Question 5

Three key functions of a cheque

Answer 5

Payee
Drawer
Drawee

Question 6

Cheques

Answer 6

A cheque is a written order to a bank to pay a specific amount of money from a person’s account (drawer) to the person in whose name the cheque has been issued.

Question 7

Money order

Answer 7

A money order is a guaranteed instrument issued by banks or post offices, used for making payment of a specific amount of money.

Question 8

Why is a bank order a guaranteed payment

Answer 8

It is guaranteed as it required that the funds be prepaid for the amount shown on it.

Question 9

Debit card

Answer 9

A debit card is a plastic card Issued by financial institutions to account holders to allow them to make immediate payment for purchases, by transferring money from the account holder’s account to that of the trader.

Question 10

Credit card

Answer 10

A credit card is a piece of plastic or metal card that is issued by financial institution which lets you borrow funds from a pre-approved limit to pay for your purchases.

Question 11

Bank draft

Answer 11

A bank draft is a type of cheque which you can buy from a bank in order to pay someone who is not willing to take accept a personal cheque.

Question 12

Telegraphic money transfer

Answer 12

This is an electronic means of transferring funds, utilized primarily for overseas wire transfers.

Question 13

Mobile wallet/m-money /mobile wallets

Answer 13

This refers to the use of a mobile phone to enable the users to store , send and receive money.

Question 14

Bank transfer

Answer 14

Bank transfer is a method of sending money electronically from one bank account to another. Transferring money from your bank account is usually fast , free and safer than withdrawing and paying in cash.