Topics in Business StudiesBusiness 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
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.
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?
Which of the following is NOT a government agency of consumer protection?
Define Consumer Protection.
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An understanding on the terms drawer, drawee and payee are required to better understand our explanations on the types of cheque.
The drawer is also referred to as the maker.
The drawee is always the party upon whom the cheque is drawn.
The payee is responsible for cashing out the cheque; that is; gets paid through the cheque.
The Types of Cheque include:
A cheque is considered to be open when it can be cashed by the payee over the counter. This implies that the payee receives the money (stipulated on the cheque) as soon as the cheque is validated.
An open cheque (also called an uncrossed cheque) can be cashed in two ways. These are via:
i. Bearer Cheque: A bearer Cheque is a cheque payable to the bearer.
The bearer is any person to whom the cheque is addressed by his or her specific names.
If a bearer cheque is lost, the payee will not be able to cash the cheque. In short, the money is as good (or as bad) as lost.
Note: The word "bearer" in a bearer cheque will not be cancelled out. This means that the cheque will have words like:
Pay "bearer" or Pay "the specific name on the cheque". For instance, Pay "Alfred Ajibola". (Please see the image below)
Since the bearer Cheque is an open Cheque, it can be payed to the payee over the counter.
An individual with a current account or savings account can request for a bearer cheque from his or her bank.
Normally, a proof of identity is not required to cash a bearer cheque but in a situation where the money to be cashed is large, a form of identification will be required.
The cashier will need to sign on the back of the bearer cheque to acknowledge that money had been received from the bank via the cheque.
Below is an image of a bearer cheque and an order cheque.
Image Credit: Lawyerment
ii. Order Cheque: An order cheque is a cheque that has the word "BEARER" cancelled on it.
The cancellation should look like this:
It is this very act of cancellation that makes a cheque an order cheque.
Under normal circumstances, an order cheque is payed into the payee's bank account. This means that the payee does not receive cash and such process can prove useful for security reasons.
If cash (or money) is paid when an order cheque is tendered, then such a cheque is called a Cash Cheque.
In this case, the order cheque must read: Pay CASH ...
Before a money is transferred into the payee's account, a form of valid identification must be issued by the payee and ratified (or approved) by the bank's cashier. In addition to this, the bank will also require the signature of the payee on the back of the cheque.
Note: The order cheque may be transferred into another person's account (called the transferor). To this end, the transferor must tender a signature in order to initiate the process.
An order check made to the bank by another person (not the payee) may still be honoured by the bank.
A crossed cheque is defined as a cheque that is crossed via two parallel lines either from top through bottom or from left to right.
The significance of the two parallel lines in a cheque is to signify that such cheque is a crossed and that money should NOT be paid directly to the payee, rather it should transferred into the payee's account
Note: This is a good thing because such account can be tracked and the money recovered in a subsequent case of fraud.
The image below shows a crossed cheque:
Image Credit: SieLearning
Note: A crossed cheque provides more security when compared to an open cheque.
As the name (Post-Dated) implies, it simple means the cheque carries a future date and as such can only be honoured by the bank after the specified date.
As an instance, suppose the cheque bears 1st January, 2020, and today's date is 20th December, 2019; it will imply that the cheque will only be honoured by the bank on or after the 1st of January, 2020.
Note: At the time a post-dated cheque was issued (by the drawer), it will have a future date written on it. The cheque can only be cashed after this date.
An Anti-Dated cheque is one that carries an earlier date and can only be cashed by the payee after the date.
As an instance, suppose today is 20th December, 2019 and the cheque is dated 10th, December, 2019; then it's an anti-dated cheque. Such a cheque will be honoured by the bank.
When a cheque remains with the payee for a long time after which it cannot be honoured by the bank; then such cheque is termed a stale cheque.
Think of a state cheque as a cheque presented by the payee to the bank for payment, but was dishonoured because it's presented after a delayed period.
The "delay period" in a stale cheque could be three months, six months or even more (depending on the drawee) after it was issued to the payee by the drawer.
In summary, an stale cheque bears a date in the past that cannot be honoured by the bank.
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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.
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:
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: