BTEC Business Review Exam Unit 3 Questions & Answers 2024/2025
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Course
BTEC Business
Institution
BTEC Business
BTEC Business Review Exam Unit 3 Questions & Answers 2024/2025
Methods of payment - ANSWERSCash, Credit/debit card; Standing orders; Direct debits; Cheque
Cheque - ANSWERSa written order directing a bank to pay money
Give 2 advantages and 2 disadvantages of using a cheque as a method of ...
BTEC Business Review Exam Unit 3
Questions & Answers 2024/2025
Methods of payment - ANSWERSCash, Credit/debit card; Standing orders; Direct debits; Cheque
Cheque - ANSWERSa written order directing a bank to pay money
Give 2 advantages and 2 disadvantages of using a cheque as a method of payment -
ANSWERSAdvantages
- low risk form of payment as the cheque can only be cashed by the named payee
- Widely accepted for face- to face or postal transactions
Disadvantages
- viewed as old fashioned
- easy to make errors when writing the cheque which can cause problems for both the consumer and the
recipient
Credit Card - ANSWERSType of card issued by a bank that allows users to finance a purchase. It is issued
by financial institutions allowing customers to delay payments for goods and services
Give 2 advantages and 2 disadvantages of using a credit card as a method of payment -
ANSWERSAdvantages
- allows a period of credit that is interest free - usually one months
- suitable for online transactions
Disadvantages
- Interest is charged on balances not paid off within a month
- can encourage customer to overspend and get into debt
Electronic transfer - ANSWERSPayment is transferred directly from one bank account to another
, Give 2 advantages and disadvantages of using electronic transfer as a method of payment -
ANSWERSAdvantages
- almost instantaneous
- provides a record of payment
Disadvantages
- Risk or loss if the transfer is set up incorrectly
- not appropriate for face to face transactions
Cash - ANSWERSNotes and coins in a wide range of denominations
Give 2 advantages and disadvantages of using cash as a method of payment - ANSWERSAdvantages
- most widely accepted form of exchange
- makes budgeting easier
Disadvantages
- can be lost or stolen
- cannot be used for online purchases
Debit card - ANSWERSA bank card that automatically deducts the amount of a purchase from the
checking account of the cardholder
Give 2 advantages and disadvantages of using a Debit card as a method of payment -
ANSWERSAdvantages
- no need to carry cash
- widely accepted & a secure method of payment
Disadvantages
- short time lapse between making the transaction and the money being drawn from the customers
account
- Not accepted or appropriate for small transactions
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