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Finance exam 14/1/22 > topics 3.8.9.12 > Flashcards

topics 3.8.9.12 Flashcards

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1
Q

What is the role of the Competitions markets authority?

A

to make markets work well for consumers, businesses and the economy

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2
Q

what is the role of the financial services compensation scheme?

A

to compensate customers if their provider defaults

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3
Q

How much do the FSCS protect up to?

A

£85,000

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4
Q

what type of payments does the fscs cover?

A

deposits, mortgages and investments

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5
Q

what are two advantages of cash?

A

instant payment, easy to carry

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6
Q

what are two disadvantages of cash?

A

can’t replace if lost, takes longer to give change which reduces efficiency

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7
Q

What is CHAPS?

A

A way of paying for high value transactions which is deposited the same day

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8
Q

What is a Bankers draft?

A

They are cheques which are prepaid and signed by the bank

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9
Q

what are two advantages of mobile/online banking?

A

24/7 access and it’s more convenient than going to a branch

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10
Q

what are two disadvantages of mobile/online banking?

A

risk of fraud and cash such as notes and coins can’t be deposited online

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11
Q

what does the prudential regulation authority do?

A

sets standards and supervises financial institutions

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12
Q

Who does the FCA report to?

A

HM treasury

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13
Q

what is the aim of the FCA?

A

to make markets work well so consumers get a fair deal

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14
Q

What does the FOS do?

A

Deals with complaints from customers about their providers

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15
Q

what is the process of dealing with the FOS?

A

contact provider directly > contact FOS if providers hasn’t responded in 8 weeks > Take matter to court

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16
Q

what are two advantages of CHAPS?

A

no limit to the amount of money transferred, same day delivery of payment

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17
Q

what are two disadvantages of CHAPS?

A

cutting off times on weekdays can be restrictive, sending money to the wrong account can make it hard to get the money back

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18
Q

what are two advantages of electronic payments?

A

convenient, automates payments can be set up

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19
Q

what are two advantages of a cash card?

A

Good for under 18’s, encourages saving money as it’s more effort to withdraw money

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20
Q

what is a disadvantage of using a debit card abroad?

A

You get charged a fee for using it abroad

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21
Q

what are two advantages of a pre paid travel card?

A

currency can be converted at point of sale so it’s not restricted to one currency, can withdraw as cash at ATM

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22
Q

what are two disadvantages of a pre paid travel card?

A

could be stolen while abroad, have to apply for one which sometimes costs money

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23
Q

What is a travellers cheque?

A

It is a cheque which is a set amount of money such as 50, 100 or 500 that can be used abroad

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24
Q

what are 3 responses to the credit crunch in 2008 that were recommended by the independent commission on banking?

A

improve regulation of providers, make sure banks are able to absorb any losses, reduce the amount of risks banks take

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25
Q

who is the uk regulatory system supported by?

A

The FOS, FSCS and the money advice service

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26
Q

what is a budget?

A

a plan of their expected incomings and outgoings over a set time period

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27
Q

what is a cash flow forecast?

A

plans of their expected incomings and outgoing over several time periods

28
Q

what is earned income?

A

Income that is earned from working

29
Q

what is unearned income?

A

income that wasn’t earned from working

30
Q

what are 3 examples of unearned income?

A

benefits, state pension, interest on savings

31
Q

what is mandatory expenditure?

A

compulsory payments you are obligated to pay

32
Q

what are some examples of mandatory expenditure?

A

Income tax, council tax and motor insurance payments

33
Q

what is essential expenditure?

A

Expenditure on items that are needed to live

34
Q

what are some examples of essential expenditure?

A

Rent, food costs, utilities

35
Q

what is discretionary expenditure?

A

voluntary spending on items that are wants

36
Q

what are some examples of discretionary expenditure?

A

clothes, DVD’s, holidays

37
Q

what is a budget balance?

A

a persons net financial situation

38
Q

what is the formula for budget balance?

A

total income - total expenditure

39
Q

what is a zero balance?

A

when the budget is balanced with all income assigned to be used on making payments, repaying loans or saving

40
Q

what is a positive balance?

A

the budget is in surplus and there is money to increase spending

41
Q

what is a negative balance?

A

means that the budget is in deficit so they will have to decrease spending or increase income if possible

42
Q

what is the national minimum wage bracket for 23 and over?

A

£8.91

43
Q

what is the national minimum wage for 21 to 22 year olds?

A

£8.36

44
Q

what is the national minimum wage for 18 to 20 year olds?

A

£6.56

45
Q

What is the national minimum wage for under 18’s?

A

£4.62

46
Q

what is the national minimum wage for apprentices under 19?

A

£4.30

47
Q

what is the maximum number of hours an employee can work?

A

a maxiumum of 48 hours per week averaged over 17 weeks

48
Q

How much holiday is an employee entitled to if they work 5 days a week?

A

5.6 weeks per year

49
Q

How many hours of rest is an employee entitled to in any 24 hour period?

A

11 hours

50
Q

how many days off is an employee entitles too each week?

A

1 day off each week

51
Q

what is the percentage of tax for the basic rate?

A

20%

52
Q

how much money do you earn if you pay basic rate tax?

A

£12,571 to £50,270

53
Q

What percentage of tax to higher rate earners pay?

A

40%

54
Q

How much money do you have to be earning to pay higher rate tax?

A

£50,270 to £150,000

55
Q

How much tax do additional rate earners pay?

A

45%

56
Q

How much do you have to earn to pay additional rate tax?

A

over £150,000

57
Q

how much is the personal savings allowance for basic rate tax band?

A

£1000 tax free savings

58
Q

how much personal savings allowance do higher rate savers get?

A

£500 tax free savings

59
Q

how much personal savings allowance does an additional rate saver get?

A

none

60
Q

What qualifies someone to pay national insurance?

A

if they are aged 16-66 and earn more than £184 - £967 a week

61
Q

what rate do self employed people pay per week?

A

£3.05

62
Q

What are the PAYE documents

A

a payslip, a P60 and a P45

63
Q

what is a P45?

A

a document which is prepared when an employee leaves an employer

64
Q

what is a P60?

A

a document which is prepared at the end of every tax year

65
Q

What do payslips show?

A

Earnings before and after deductions and tax code

66
Q

what does a P45 show?

A

tax code,PAYE reference number,leaving date, NI number

67
Q

what might you need a P60 for?

A

applying for loans, applying for mortgages and complete a self assessment tax return

Finance exam 14/1/22 (1 decks)

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