Business Studies

Methods of payment: Bank notes and coins explained with their characteristics

len Alfred Ajibola - Sat, 15th June, 2019 @ 4:17 PM

Topics in Business Studies

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Academic Questions in Business Studies

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An accounting system focused primarily on a balanced debit and credit side is termed _____.

  • A. Ledger system

  • B. Journal system

  • C. Double entry system

  • D. Balance sheet system

  • E. Principle of accounting system

  • F. Balanced accounting system

With regards to money, which of the following statement is incorrect?

  • A. Money is crucial for the survival of every human being

  • B. Money is completely advantageous

  • C. Money is defined as anything that is generally accepted as a medium of exchange

  • D. Monopoly is said to exist when money and wealth exists in the hands of a few

  • E. Excess money in an economy can lead to inflation

  • F. When a person receives money that isn't commensurate with the job he or she had done, then that's underemployment

Which of the following statement is wrong with regards to business?

  • A. Business involves the exchange of something for another thing or money

  • B. Business is an economic activity

  • C. In business, profit goes beyond money

  • D. Businesses do not have social responsibilities to their customers

  • E. The exchange of services is an aspect of business

  • F. Businesses can be affected by government policies

Consumer _____ are the laws and methods put in place by various agencies so that consumers can enjoy maximum satisfaction on the goods they buy and services rendered to them.

  • A. Protection
  • B. Policy
  • C. Rights
  • D. Defence
  • E. Guide
  • F. Safety

Which of the following is not a characteristics of business?

  • A. The buyer and seller must always come into a contract agreement

  • B. Risk from unforseen circumstances is involved

  • C. They are subject to policies made by the government

  • D. All business transaction is aimed at making profit

  • E. It requires a discontinuous transaction between the buyer and the seller

  • F. Investments are required to begin a business

Which of the following is not a Right of Consumer Protection?

  • A. Right to Education
  • B. Right to Choose
  • C. Right to Safety
  • D. Right to the Good things of Life
  • E. Right to be Assured
  • F. Right to Compel

Which of the following is NOT a government agency of consumer protection?

  • A. Ministry of Sports
  • B. Ministry of Commerce
  • C. Consumer Protection Council
  • D. Ministry of Health
  • E. Ministry of Environment
  • F. National Drug Law Enforcement Agent

Define Consumer Protection.


Methods of payment:

As students or workers, we may have carried out one or more transactions through commercial banks. Some of these transactions may include:

  • Payment of school fees.
  • Purchasing items from an online store.
  • Transfer of money into another’s account.
  • Payment of examination fee and so on.

The above transactions can be done either physically or online.


An online transaction is done over the internet. As a result, we do not have to be physically present at the transaction center.

Please read the introduction to credit and debit cards here.


During the registration and payment procedures for an online examination: let’s say JAMB for instance, we don’t necessarily need to go to the bank, neither a JAMB agent nor the physical office of JAMB. All we need do is to connect to the internet where we can register, make payments (perhaps through a credit card) and select our examination center on JAMB's website. This is made possible since we live in a digital world driven by the internet.

Please read on internet evolution here.


The methods of making payments through commercial banks include the following:

  1. Bank Notes and Coins

  2. Cheques
    Please read on cheques here.

  3. Credit Cards

  4. Debit Cards
    Please read the similarities and differences between credit and debit cards here.

  5. Travellers' Cheque

  6. Bank Drafts


  • Bank Notes and Coins

This is the most widely used form of payment since it involves the direct exchange of currency (money). Bank notes are used more in developing countries due to the low valuation of their currencies. Meanwhile, understand that notes and coins are also frequently used in developed nations although the cashless policy is encouraged for security reasons.

Note: Bank notes are coins are generally accepted as legal tenders.


A legal tender is a recognized and valid medium of payment according to the legal and financial systems of a country.


The images below shows an American coin (Half Dollar) and the Nigerian Note (1,000 Naira).

Half Dollar - Len Academy

1,000 Naira Note - Len Academy

Different countries have got their respective currencies in circulation. The table below shows the currencies within some countries and their respective symbols:


Country

Currency value

Symbol

 Nigeria

Naira

 United States of America

Dollar

$

 United Kingdom

Pounds

£

 Japan

Yen

¥

 France, Spain, Italy, Estonia and Latvia

Euro


In Nigeria, the currency denominations are ₦1,000, ₦500, ₦200, ₦100, ₦50, ₦20, ₦10 and ₦5 respectively.

Please read on the Nigerian national symbol here.

Note: Coins are no longer in circulation within Nigeria.


Characteristics of legal tender (bank notes and coins)

  1. They are easily recognized by the people living in a country where it is used.
  2. They act as means of exchange accepted in every place where trade and market occur.
    Please read on foreign trade here.
  3. They are available in different denominations.
  4. They always have a store of value.
  5. They serve as the standard for deferred payment. Think as deferred payment as 'buy now, pay later'.
    Please read more on deferred payment here.
  6. A specific demonization will always have a fixed or specific worth. For instance, a 100 Naira note will always have a worth of '100 Naira' everywhere in Nigeria.
  7. They are not heavy in weight. This implies that they are easy to carry around.
    You can read on the concept of weight and mass here.
  8. They normally exist as bank notes and coins.
  9. They are the unit of bank accounts.

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Amazing facts in Business Studies

The world's 100 richest people earned enough money in 2012 to end global poverty four times over


NOTABLE POINTS IN Business Studies

Consumer protection refers to the ways or methods through which consumers enjoy maximum satisfaction from the goods they buy and services rendered to them.

The agencies of consumer protection assists in protecting the consumer rights. These agencies may also be referred to as the organs of consumer protection. Basically, we have three of them, they are:

  1. Government Agencies

  2. Independent Agencies

  3. Legislation

Please read on consumer protection here

One of the responsibilities of the government of every nation is to set up agencies or organizations that will protect the interest of the consumers and invariably, the people.

Below are some of the government agencies of consumer protection:

  • National Drug Law Enforcement Agency (NDLEA)
  • National Agency for Food, Drug Administration and Control (NAFDAC)
  • Consumer Protection Council (CPC)
  • Rent Tribunal
  • Ministry of Health
  • Ministry of Commerce
  • Ministry of Transportation
  • Ministry of Environment
  • National Wages and Salaries Commission

Please read on the government agencies of consumer protection here