LIBF Level 2 Unit 2: Money Management Solutions Test A

Which of the following cannot be achieved using an ATM?

• Changing your address.
• Changing your PIN.
• Checking your balance.
• Printing a mini-statement.

Answer explanation

This is not a function of an ATM.

What would a gas company use to take a payment from a customer's bank account each month?

• A direct debit.
• A standing order.
• An automated sweep.
• An express transfer.

Answer explanation

The amount could alter, which is why a direct debit rather than a standing order would be used.

Which of the following is an advantage of using internet banking to manage your money? Internet banking enables you to:

• get a better credit score.
• have access to your account 24 hours a day.
• make purchases on the internet.
• stop debit card payments.

Answer explanation

Internet accounts usually provide 24-hour account access.

Which of the following will provide the most useful information to help someone manage their money?

• Bank statement.
• Bills.
• Cheque book.
• Payslips.

Answer explanation

A bank statement would be the most useful because it gives information about all transactions for the past month.

Which of the following does not appear on the front of a debit card?

• Cardholder's name.
• Current account number.
• Expiry date.
• Security number.

Answer explanation

The security number appears on the back of a debit card.

Barbara has a credit card, which she uses frequently. How often will Barbara be required to make payments to the credit card issuer?

• Weekly.
• Fortnightly.
• Monthly.
• Quarterly.

Answer explanation

Credit card payments are monthly.

A debit card cannot be used to:

• make online payments.
• make payments in shops.
• obtain cashback in shops.
• obtain credit on purchases.

Answer explanation

obtain credit on purchases.

Which of the following statements is true? A credit card:

• cannot be used to make payments.
• cannot be used to withdraw cash.
• is a way of borrowing money.
• is linked to a current account.

Answer explanation

is a way of borrowing money.

Which of the following applies only to overdrafts?

• AER.
• CPI.
• EAR.
• RPI.

Answer explanation

The equivalent annual rate (EAR) is used to quote the interest rate and fees charged on overdrafts.

Frank buys a car using £3,000 finance, over five years, at 8% APR per annum. When the finance is repaid, how much in total will Frank have paid back?

• 3000
• 3240
• 4200
• 5400

Answer explanation

£3,000 plus (8% of £3,000 x 5), ie £1,200 = £4,200.