22 Questions
Which method of transferring money is described as a plastic card with a sixteen digit card number and allows the user to make payments by transferring funds electronically from their bank account?
Credit Card
What issue is associated with using cash as a method of transferring money?
Fraud and money laundering
In the context of transferring money, what does BACS stand for?
Bankers Automated Clearing Service
Which method of transferring money involves a direct receipt of money into a person's bank account through a safe and convenient process?
Bank Giro
What are the three parties involved in a cheque transaction?
The drawer, the drawee, and the payee
Which method of transferring money is described as 'the most widely used method' but has an issue with security due to its susceptibility to theft and fraud?
Cash
What is the primary purpose of the bank statement?
To provide a summary of transactions during the month
Why might the bank balance differ from the balance in the cash book?
Due to errors in recording transactions in the cash book
What are examples of items that may be entered in the cashbook but not yet on the bank statement?
Outstanding cheques and unrecorded deposits
What is meant by 'unpresented or outstanding cheques'?
Cheques recorded in the cashbook but not yet presented for payment
When are bank lodgements also known as unrecorded deposits?
When cheques are credited in the cashbook and deposited in the business bank account
What might cause a difference between the bank balance and cash book balance?
Errors made in either the cashbook or on the bank statement
What is the purpose of a bank reconciliation?
To identify discrepancies between the bank statement and cashbook balances
When does interest received on savings or deposit accounts get recorded in the cashbook?
When the bank statement is received
What is a common type of error in bank reconciliation?
Overstatement and understatement of receipts and payments
What are standing orders in the context of banking?
Payments made by the business to the bank at regular intervals
When are returned cheques typically recorded on the bank statement but not in the cashbook?
At the end of the month
How are unrecorded receipts treated in bank reconciliation?
Debited in the cashbook
What is the purpose of comparing the debit side of the cashbook with the credit side of the bank statement during bank reconciliation?
To identify unrecorded payments
What should be done with items that appear on the bank statement but not in the cashbook during bank reconciliation?
They should be debited in the cashbook
What is deducted from the current account at the end of the month as a service charge by the bank?
$5 for every cheque issued during the month
'Receipts' mentioned in the text refer to what type of transactions?
Deposits made into the business's bank account
Explore different methods of transferring money within the banking system, including the advantages and security issues associated with cash and cheques.
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