LIBF Level 2 Unit 1: Personal Financial Encounters Test B

Money has to be hard-wearing because:

• banknotes must last 40 years.
• it changes hands many times.
• it must be acceptable by shops.
• shops keep it in tills.

Answer explanation

It is because notes and coins change hands thousands of times.

Which of the following is not legal tender when paying for an item in the UK? Paying:

• £5 in 10p coins.
• £10 in 20p coins.
• £20 in 50p coins.
• £30 in £1 coins.

Answer explanation

The limit is £10 with 50p coins.

In the UK, what is the maximum amount, if any, in £2 coins that a shop is legally obliged to accept in payment from a customer?

• £10

• £50

• £100

• Any amount.

Answer explanation

There is no maximum legal tender limit for £2 coins in the UK.

Jobseeker's Allowance cannot be claimed by someone who is:

• over state pension age.
• unable to work due to illness.
• under state pension age.
• under the age of 21.

Answer explanation

Jobseeker's Allowance can be claimed by someone who is over 18 and under state pension age.

Which of the following most commonly describes somebody who works for themselves? They:

• can choose how many days they work a week.
• do not automatically receive a state pension.
• are guaranteed to earn the same amount every month.
• receive a payslip from their employer.

Answer explanation

Someone who is self-employed can chose when they work.

The amount of income tax shown on a payslip depends on a person's:

• credit rating.
• earnings.
• expenditure.
• occupation.

Answer explanation

It depends on how much they earn.

During the current tax year, John's tax code is 1250L and his total earnings are £4,670. How much income tax, if any, will John pay?

• £0

• £467

• £934

• $1,250

Answer explanation

John's earnings do not exceed the personal allowance, i.e. his earnings are less than £12,500 so he doesn't pay any tax.

Someone who has several financial transactions each month would find it best to have which type of account?

• Cash ISA.
• Current.
• Deposit.
• Instant-access savings account.

Answer explanation

They would find it best to have a current account.

What is the main difference between a notice account and an instant access account? With a notice account the:

• customer must give the provider warning before drawing the money out.
• provider must give the customer warning before issuing a bank statement.
• interest rate will always be higher.
• interest rate will always be lower.

Answer explanation

The difference is that a notice period is required before a withdrawal can be made.

Before they are completed, pre-printed paying-in slips show two numbers. These are the:

• account number and date.
• personal identification number (PIN) and branch identifier.
• sort code and account number.
• sort code and customer reference.

Answer explanation

The sort code and account number are shown.