Commerce Revision Test 02

To avoid paying interest, credit card holders should pay for their goods.

• at the time of purchase.

• before a date given on the monthly statement.

• two months after the purchase date.

• when their goods arrive.

Which statement explains why retailers offer credit to consumers?

• to decrease retailers’ costs

• to decrease consumers’ incomes

• to increase consumers’ debts

• to increase retailers’ sales

Which question is most important for a customer considering buying goods on credit?

• Are the goods fit for the purpose?

• Do the goods represent value for money?

• What discount will be given by the retailer?

• What is the difference between the cash price and the credit price?

Which statement about credit is not true?

• Credit enables buyers to purchase expensive goods.

• Impulse buying is encouraged by having credit available to use.

• Offering credit to customers is risk-free for retailers.

• Spending on credit means borrowing against your future income.

What is a disadvantage to the buyer of buying a television on credit?

• A credit check will be made by the seller.

• Interest may be charged by the seller.

• Payment is postponed until a later date.

• There is no need to carry a large amount of cash when buying.

Susan buys a jacket using a credit sales agreement. The cash price is $290. Susan pays $50 deposit and the rest of the debt, on which 10% interest is charged, in 12 equal monthly instalments. What will be the total credit sales price?

• $266

• $290

• $314

• $340

Suleiman has received his credit card statement which contains the following information. What is the best way for Suleiman to avoid paying any interest on his credit card?

• pay $750 after 21 October

• pay $2000 before 21 October

• pay $2250 after 21 October

• pay $2250 before 21 October

A computer is offered for sale by cash or by hire purchase on the following terms.

Cash price $400

Hire purchase with a deposit of $50 and 24 monthly instalments of $20 each

How much more will the customer pay if she buys the computer using hire purchase?

• $130

• $400

• $480

• $530

How does buying on credit contribute to a country’s standard of living?

• Consumers are able to buy what they want or need.

• Many people accumulate large amounts of debt.

• More goods will be imported for sale.

• People will save less of their income.

Informal credit is most likely to be offered to customers of

• department stores.

• hypermarkets.

• independent retailers.

• multiple shops.