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Business UNIT 3 Part A > Planning Expenditure & Payment Methods > Flashcards

Planning Expenditure & Payment Methods Flashcards

1
Q

What are 4 common principles when planning expenditure?
1. Remaining __________.
2. Avoid getting into ________.
3. ____________ income and savings.
4. Providing _____________ for emergencies.

A
  1. solvent
  2. debt
  3. Generate
  4. insurance
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2
Q

What is cash?
_______________________ (coins or notes) used to exchange goods, debts or services.

A

Physical currency

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3
Q

What are the advantages of cash?
1.
2.

A
  1. Easier to budget your money.
  2. No debt.
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4
Q

What are the disadvantages of cash?
1. Easily ____________.
2. On one occasion, you may not have enough cash to cover an ______________________.

A

stolen
emergency cost

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5
Q

What is a cheque?
An ___________ to a bank to pay a stated sum from the ____________________.

A

order
drawer’s account

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6
Q

What are the advantages of cheques?
1.
2.

A
  1. If a cheque is lost, no money will be lost.
  2. Only the named recipient can receive the money.
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7
Q

What are the disadvantages of cheques?
1.
2.
3.

A
  1. It takes 3 working days to transfer money.
  2. Not many shops accept them.
  3. It can easily lead to fraudulent payment transaction.
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8
Q

What is electronic transfer?

A

When payment is transferred directly and digitally from one bank account to another.

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9
Q

What are 2 advantages of electronic transfer:
1.
2.

A
  1. It is almost instant.
  2. Provides a record of payment.
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10
Q

What is a disadvantage of electronic transfer?

A

There is a risk of loss if the transfer is set up incorrectly.

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11
Q

What are the 6 different types of cards:
1.
2.
3.
4.
5.
6.

A
  1. Debit card.
  2. Credit card.
  3. Pre-paid card.
  4. Contactless card.
  5. Charge card.
  6. Store card.
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12
Q

What are the advantages of a debit card?
1.
2.

A
  1. Can withdraw cash from various places.
  2. Secure.
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13
Q

What are the disadvantages of a debit card?
1. Need to ___________________ the bank balance.
2. Overspending has __________________.

A
  1. monitor overspending
  2. costly effects
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14
Q

What are the advantages of a credit card?
1.
2.

A
  1. Allows you to defer and spread payments.
  2. Widely accepted.
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15
Q

What are the disadvantages of a credit card?
1.
2.

A
  1. Interest charged on outstanding balance.
  2. Can encourage overspending.
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16
Q

The difference between a debit and credit card is that a debit card does not use borrowed money.

A credit card is borrowed money from a credit card provider.

The credit card provider will charge you interest called an _______; ____________________.

A

APR
annual percentage rate

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17
Q

A prepaid card is a type of card ____________ with money, but not linked to a _______________ (unlike a debit card).

A

preloaded
bank account

18
Q

What are 2 advantages of a prepaid card:
1.
2.

A
  1. They are available to anyone.
  2. No risk of overdraft.
19
Q

What is a disadvantage of a prepaid card:

A

May involve a fee to purchase the card in the first place.

20
Q

A contactless card is a type of card with an ___________________ that only needs to be held close to a terminal to transfer its data; no ________________ needs to be entered.

It is secure, but only allowed for small transactions (no outlet shopping).

A

embedded chip
PIN number

21
Q

A charge card is a type of card that works like credit cards, except _________________________________________.

A

balance must be paid in full every month

22
Q

What are 2 advantages of a charge card?
1.
2.

A
  1. Has a short period of credit.
  2. High spending limit.
23
Q

What is a disadvantage of a charge card:
Failure to repay results in _________________________, (usually much higher than a standard credit card).

A

very high late payment fees

24
Q

Store card is a ______________ issued for a specific store.

A

credit card

25
Q

What is an advantage of a store card:
May offer ________________ and _____________ as a bonus.

A

loyalty schemes
discounts

26
Q

What are 2 disadvantages of a store card:
1.
2.

A
  1. Only accepted in a specific store.
  2. Rates of interest are often very high.
27
Q

Direct debit is an ________________ made with a bank to allow a ______________ to withdraw a _______________ amount of money from an account on a ___________.

This is to pay for goods or services received: e.g. pay a gas bill

A

agreement
third party
flexible
set day

28
Q

What is an advantage of direct debit?

A

Ensures regular payments are not missed.

29
Q

What is a disadvantage of direct debit?
The payment the third company part demands may _______ sometimes, which makes _______________ difficult.

A

vary
budgeting

30
Q

What is a standing order?
An ________________ made with a bank to allow a ______________ to withdraw a _________ amount of money from an account on a ___________.

A

agreement
third party
fixed
set day

31
Q

Direct Debit: Controlled by the _____________________; so there is a _________________________, which guarantees a __________ in case of errors.

Standing Order: Controlled by the ___________; so there is _______________________.

A

third party company
Direct Debit Guarantee
refund

payer
full control over payment details

32
Q

What are 2 advantages of mobile banking?
1.
2.

A
  1. Easy to access.
  2. More secure than internet banking.
33
Q

What are 2 disadvantages of mobile banking?
1. Not available on ______________.
2. Regular use of mobile banking can lead to _______________ given by the bank.

A
  1. all phones
  2. extra charges
34
Q

Banking Automated Clearing Service (BACS) is a type of payment allowing to transfer money ____________ and ____________ between __________________.

A

securely
quickly
bank accounts

35
Q

Clearing House Automated Payment System (CHAPS) is a system allowing the transfer of payment to go _________________________.

A

straight to another account

36
Q

CHAPS typically take ______________________ to process.

BACS typically take ____________________ to process.

A

several business hours

three working days

37
Q

The CHAPS transfer system is for: ___________________________.

While BACS is better suited for: _________________________________.

A

larger, one-off payments

lower-value, regular transactions

38
Q

What does FPS stand for?

A

Faster Payment Service.

39
Q

What is FPS’s main advantage that makes it easy to transfer money between friends:

A

The transfer is instant.

40
Q

What are the 2 advantages of BACS, CHAPS, and FPS?

It is:
1.
2.

A
  1. Quick.
  2. Secure.
41
Q

What is 1 disadvantage of BACS, CHAPS, and FPS?
May incur an ____________________ per _____________, so care must be taken that all details are correct.

A

additional charge
transaction

Business UNIT 3 Part A (7 decks)

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