Chapter 5 Activities

1. Customers have obligations to their bank. Which of the following is a customers obligation?

A) To repay the amount of their deposits on demand

B) Not to disclose any information regarding the affairs of the bank

C) To use a professional level of care and skill in dealing with their accounts

D) Not to draw up cheques in a way to facilitate forgery

2. When may a bank return a cheque to the payee?

(i) When it is more than six months out of date

(ii) When it is unsigned

(iii) When the account holder has insufficient funds to cover the cheque

(iv) When the cheque is crossed A/c payee and it is presented by the named payee

A) (i), (ii) and (iii)

B) (i), (ii) and (iv)

C) (i), (iii) and (iv)

D) (ii), (iii) and (iv)

3. What is the effect of endorsing a cheque account payee?

A) It need not go through the clearing system

B) It cannot be transferred to another person for them to pay the cheque into their bank account

C) It can be transferred to another person for them to pay the cheque into their bank account

D) It enables someone other than the account holder to sign a cheque

Given below are the authorised cheque signatories:

• G Gammage – Finance Director
• F Freud – Managing Director
• P Palim – Marketing Director
• T Timms – Finance Manager
• S Simon – Production Manager

The cheque signatory limits are:

• Amounts up to $1,000 – One manager
• $1,001 to $2,000 – Two managers
• $2,001 to $5,000 – One director
• $5,001 to $10,000 – Two directors
• $10,001 to $20,000 – One director plus the finance director
• Over $20,000 – Managing director plus the finance director

1. Which form of payment allows a purchaser to immediately transfer money from their bank account to the sellers bank account?

A) Cheque payment

B) Charge card

C) Credit card

D) Debit card

2. Which form of automated payment would be useful in paying wages to employees?

A) BACS

B) Credit transfer

C) Direct debit

D) Standing order

3. In which of the following instances would a different form of payment be requested for the purchase of goods costing $40?

A) When a customer pays by cheque

B) When a customers credit card company states that the transaction would exceed the set credit limit

C) When a customer pays by $1 and $2 coins

D) When a customer is only able to pay by debit card