Unit 3 Flashcards
Advantages of Car insurance
No claims bonus
What are the types of online customer communication
Online banking
Pawn brokers
Telephone banking
More types of financial organisations
Insurance Companies
Pawn brokers
Pension companies
What are the types of financial organisations?
Bank of England
Banks
Credit unions
Definition: insurance
Insurance is a financial service that protects an individual
Yes or no, do premium bonds pay interest
No.
What does a fixed deposit do?
Pays a fixed amount for a period of time
What are the types of current accounts?
Student account
Packaged account
Basic account
Standard account
Main types of borrowing
Credit card
Loan
Mortgage
Overdraft
Advantage of an overdraft
Easy to set up
Disadvantages of an overdraft
High interest rates
Disadvantage of an overdraft (2)
High interest rates
Advantages of a personal loan
Monthly installments
Disadvantages of a personal loan
Arrangement fees
Advantage of a mortgage
Purchase for a long period of time.
Disadvantages of Mortgage
Items may be repossessed
What is the financial ombudsman service
Is an independent body that resolves disputes between customers and institutions
What is the financial conduct authority
Regulates the conduct of financial service providers
Definition: inflation
Inflation is when the prices of food rise due to the decrease in the value of money.
What are the functions of money
Units of account
Means of exchange
Store of value
Factors influencing the view of money
High interest rates
Culture
Life events
Why do we plan expenditure
To generate income
Avoid bankruptcy
Control costs
What are the most common payment methods?
Credit card
Debit card
Cash
Cheque
What are the two main types of ISA?
(Individual Savings Account)
Cash ISA
Stocks/shares ISA
What is credit rating?
Score that tells you how much money you have been paying overtime.
What is bankruptcy
Where you have no money left due to unpaid loans and debts
What is debt?
How much money you own off from a loan
What are interest rates?
Rate of borrowing money or the reward of Saving it
Disadvantage of pet insurance
Vaccinations are not covered
Disadvantages of health insurance
Pre existing medical records are not covered
Advantages of health insurance
Covers the entire medical costs
Disadvantages of car insurance
Costly
Expensive
Advantages of pet insurance
Cover The Cost
Disadvantage of home insurance
Only covers the rebuilding of the property.
Advantages of home insurance
Covers the cost.
What is an Overdraft?
Allows Bank holders to withdraw more money than they have
What is an Individual Savings Account?
Savings where the owner is not charged on income
Disadvantage of Credit Cards
High Interest Rates
Lead to high amounts of debt
Disadvantage of Debit Cards
Limited fraud Protection
Overspending
Advantage of Debit Card
Easy to use
Low Interest rates
Advantage of a Credit Card
Avoids Overspending
Most common payment method
What is crowdfunding
A way of raising money to finance business events
What is a shareholder
Someone who has an interest in a business in return for an equity
What is expenditure
The amount of money to cover all expenses
Advantage of life insurance
Peace of Mind
Disadvantage of Life insurance
Costly
Expensive
Advantage of Travel insurance
Covers Medical Cost
Disadvantage of Travel Insurance
Limited Coverage
What are the types of revenue Income?
Credit Sales
Cash Sales
Interest received
What are the types of capital income?
Mortgage
Loan
Shares
What are the purposes of accounting?
Compliance
Recording Transactions
Control
What is consumer protection?
laws and regulations that protect customers from being treated unfairly
What is a consumer credit legislation?
is a rule that a financial provider has to follow
What are the types of revenue expenditure
Rent
Insurances
Wages
Interest paid
What are the internal sources of finance?
Sale of assets
Retained profit
Net current assets
What are the external sources of finance?
Loans
Crowdfunding
Hire purchase
What is HMRC?
HMRC is the tax authority of the United Kingdom
What are the type of current assets
inventories
trade receivables
prepayments
Advantage of Net Current Assets
Effective Cash Flow
Disadvantages of Net Current Assets
Pressure on customers
Advantage of Crowdfunding
High exposure
Access to Capital
Disadvantage of Crowdfunding
Costly
Loss of reputation
What are inflows and outflows
Inflows = money coming into the business
Outflows = money coming out of the business
What is cash flow
Movement of money throughout the business
What is Liquidity
Firms ability to meet short-term payments
What is credit period
Length of time given to customers to pay goods
What is insolvent
When a firm is unable to meet short-term payments
