FL1: Revision 2

A bounced cheque means the bank successfully processed the payment.

• True

• False

Answer explanation

A bounced cheque indicates that the bank could not process the payment, usually due to insufficient funds. Therefore, the statement is false.

In the UAE, bouncing a cheque can lead to legal consequences such as fines or account freezing.

• True

• False

Answer explanation

True. In the UAE, bouncing a cheque is a serious offense that can result in legal actions, including fines and the freezing of bank accounts.

The bank always clears a bounced cheque the next day automatically.

• True

• False

Answer explanation

The statement is false because banks do not automatically clear bounced cheques the next day. They typically require the account holder to address the issue before processing any further transactions.

Writing a cheque without checking your account balance can cause it to bounce.

• True

• False

Answer explanation

Writing a cheque without checking your account balance can lead to insufficient funds, causing the cheque to bounce. Therefore, the statement is True.

One way to avoid bounced cheques is to use online banking to monitor your account.

• True

• False

Answer explanation

True. Monitoring your account through online banking helps you keep track of your balance and transactions, reducing the risk of writing cheques without sufficient funds, thus avoiding bounced cheques.

A savings account helps you earn interest on the money you store in the bank.

• True

• False

Answer explanation

True. A savings account is designed to help you earn interest on the money deposited, making it a beneficial option for saving.

Savings accounts are mainly used for daily purchases and unlimited withdrawals.

• True

• False

Answer explanation

Savings accounts are primarily intended for saving money, not for daily purchases. They often have limitations on withdrawals, making the statement false.

Banks give interest to customers as a reward for saving money over time.

• True

• False

Answer explanation

True. Banks reward customers for saving money by paying interest, which is a percentage of the deposited amount, encouraging people to save over time.

A checking account is the best choice if your goal is long-term saving.

• True

• False

Answer explanation

A checking account is designed for everyday transactions, not for long-term saving. For long-term savings, options like savings accounts or investment accounts typically offer better interest rates and growth potential.

Savings accounts encourage discipline and good financial habits.

• True

• False

Answer explanation

True. Savings accounts promote discipline by encouraging regular deposits and saving habits, helping individuals manage their finances better and achieve their financial goals.