LIBF Level 2 Unit 1: Personal Financial Encounters Test A

Which of the following characteristics of money enables people to buy items of varying value and enables them to get change? Money is:

• accepted by people and shops.
• always worth the same amount.
• available in different amounts.
• easily recognisable by everyone.

Answer explanation

The fact that money is available in different amounts enables this.

Which of the following is not a reason that Bank of England banknotes have security features on them?

• To make them accepted by others.
• To make them difficult to copy.
• To make them look like other currencies.
• To make them recognisable.

Answer explanation

This is not a valid reason to include security features.

In England and Wales, how many different denominations of bank notes are legal tender?

• One
• Two
• Three
• Four

Answer explanation

£5, £10, £20 and £50.

Tom is a beneficiary of money left in his elderly aunt's will. This money is known as:

• a capital gain.
• a codicil.
• a gift.
• an inheritance.

Answer explanation

This money is known as an inheritance.

Ahmed is a market researcher. He has no guarantee of any work and is called on by the agency whenever they need surveys to be undertaken. He does this only if it fits in with his studying. This is known as:

• casual work.
• full-time work
• part-time work.
• shift work.

Answer explanation

Ahmed is a casual worker.

Dino is completing his annual tax return. Who should he send it to when it is completed?

• Bank of England.
• HM Revenue & Customs.
• National Savings and Investments.
• The Post Office.

Answer explanation

He should send it to HM Revenue & Customs.

Which of the following does Pay As You Earn (PAYE) relate to?

• Bank interest.
• Capital gains tax.
• Income tax.
• Value added tax.

Answer explanation

PAYE (Pay As You Earn) relates to the automatic payment of income tax by an employee.

Which of the following identifies the specific branch of a bank? Its:

• personal identification number (PIN).
• serial number.
• sort code.
• unique identity number.

Answer explanation

The sort code identifies the bank and branch.

Maisie has just started a newspaper round. She already has a current account and a savings account with the same provider. She wants to put £20 each month into her savings account from her current account. What will be the best way for her to do this?

• Credit transfer.
• Direct debit.
• Paying-in slip.
• Standing order.

Answer explanation

Standing order is the best way.

Mac's wages have been paid into his bank account. With immediate effect, this means that his:

• credit balance will decrease.
• credit balance will increase.
• mortgage will increase.
• personal loan will decrease.

Answer explanation

This would make his credit balance increase.