Summere Test Questions Flashcards
What is a budget
A budget is a financial plan of expected future income and expenditure.
Why do people prepare a budget
People create budgets to live within there means and to be aware about how much they are so and how much they are earning
What is a balanced budget
A balanced budget refers to a situation where income exactly equals expenditure.
What is a budget surplus
A budget surplus occurs when income is greater than expenditure.
When does a budget deficit happen
A budget deficit occurs when income is less than expenditure.
What can you do if you have a budget surplus
You can save or invest the money,use it to repay a loan or use it to fund some extra expenditure such as a family holiday
How do u deal with a budget deficit
You can increase income buy taking on an extra part time job or work overtime. You could cut back on expenditure and only buy things you need or you could take out a loan.
What is a commercial bank?
A commercial bank is a bank that offers financial services to the general public and to businesses.
What is a current account
A current account is used for day-to-day banking needs. It is a convenient way for you to
Receive your income,Store money safely,
Pay for goods and services and Pay bills and transfer money to other people.
Give me 2 ways money is lodged into an account.
An employer can transfers wages or salary directly into the account and your pension and benefits are paid directly into your current account
What is a debit card for.
Debit cards allow consumers to pay for goods and services without using cash
Define direct debit
A current account holder gives permission to another person or business to withdraw variable amounts from their account. Direct debit is used when the amount to be paid and/or the payment date are likely to change. The person or business who is owed money by the current account holder is called a creditor.
What is standing order
A standing order is an instruction to a financial institution to pay a fixed amount to a specific person or organisation on a certain date.
What is a credit transfer
A credit transfer is a once off instruction from a current account holder to their bank to transfer an amount of money to another account.
What is a bank draft
This is like a cheque, but it is written on a bank’s own account rather than a customer’s account.