Business Studies

Advantages and Disadvantages of Cheque

len Alfred Ajibola - Fri, 20th December, 2019 @ 09:48 AM

Topics in Business Studies

Business Structure: What is a business structure? Advantages and Disadvantages of franchise What is a franchise? Types of franchise What is Corporation? Types, Advantages and Disadvantages of Corporations What is Limited Liability Company? Its Advantages and Disadvantages Partnership in Business: Types, Advantages and Disadvantages Business Studies: What is Business Studies and Business? Management: Elements of Management What is Management? Importance of Management Advantages and Disadvantages of Air Transport Advantages and Disadvantages of Rail Transport Methods of Payment: Cheque - What is a Cheque? Cheque: Types of Cheque Cheque: Characteristics of Cheque Advantages and Disadvantages of Cheque Advertising and Types of Advertising Advantages and Disadvantages of Road Transport Advantages and Disadvantages of Water Transport Consumer Protection - Agencies of Consumer Protection Consumer Right and Protection

Academic Questions in Business Studies

Please check out our Test Your Knowledge page to see all Questions and Answers

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.

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Advantages of Cheques:

A cheque is a written order to a bank to pay a specific sum of money to another person through the drawer's account.

The person who writes and signs on the cheque is called the drawer. The bank that issues the cheque to the drawer is called the drawee. The person to whom the cheque is made payable (one who would cash the cheque) is called the payee.

Please read an introduction to cheque here.


The advantages of using cheques as means of payment are listed below:

  1. A Cheque is a relatively safe method of making payments since the recipient may be required to present a valid identity card which must match the name written on the cheque.

  2. It is a simple method of cash transfer since it’s just a single slip.
    Please read on the disadvantages of money here.

  3. Payments can be stopped if needed (for security reasons).

  4. Since one does not need to count cash, there are little risks of making counting mistakes.
    Please read on bank notes and coins with their characteristics here.

  5. It prevents the direct loss of a large amount of cash.

  6. A cheque can be post-dated which may be good for business.
    Please read on the types of cheque here.

  7. The risk of fraud is limited in business by the use of cheque.
    You can read on sole proprietorship here.

  8. In case of fraud, the payee can still be discovered when a crossed cheque is used. Crossed cheques are traceable.

  9. Use of a cheque automatically creates proof of payment. As a result, no receipt is necessary.

  10. Just like credit cards, a cheque can now be processed electronically at the point of purchase. This innovation has made purchases easier.
    Please more read on credit and debit cards here.

  11. The owners of a cheque will likely get their financial statement of account monthly. They will therefore know when and how money leaves their account.

  12. The loss of a crossed cheque isn't a problem. This is so because it can be traced when misplaced or lost.
    Please read more on the characteristics of cheque here.

  13. Constant use of cheque in an economy can reduce black money in the system.
    Please read more on black market here.

Think of 'black money' as money earned through illegal activities.

 

Disdvantages of Cheque

  1. A cheque is not a legal tender. As a result, creditors may choose not to accept them.
    You can read on the agencies of consumer protection here.

  2. Cheques may not be ideal for small amounts.

  3. They become deceitful and valueless when the drawer has no money in his or her account.
    You can read on the attributes and benefits of honesty here.

  4. Banks levy the drawer for cheque books and dishonoured cheques.

  5. Having a cheque in hand does not guarantee payment since they may be dishonoured.

  6. Cheque takes time to write. The process of writing a cheque can lead to a wastage of precious time especially if done regularly. The payee may also waste some time during the process of cashing out a cheque.
    Please read on the disadvantages of money here.

  7. The bank personnel who handles a cheque will have easy access to the drawer's account number, name and possibly his or her residential address. This may present some opportunities of carrying out fraudulent activities and (even unauthorized deductions) from their account.
    Please read on bank wire and wire transfer here.

  8. People without a bank account may find it difficult to cash out a crossed cheque.
    You can read on the consequences and solutions to illiteracy here.

  9. An injury to the hand may make the signing of cheques difficult. Also, inconsistency in the signature of some people can also become an issue.
    You can read on the uniqueness of man here.

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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 10 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.

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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