LIBF Level 2 Unit 2: Money Management Solutions Test B

When withdrawing cash from an ATM, what is the account holder required to input? Their:

• card and account number only.
• card and PIN.
• card only.
• PIN only.

Answer explanation

An account holder is required to input their card and PIN.

What is a direct debit?

• A method of making regular payments.
• A transaction that makes you overdrawn.
• A type of bank card.
• An instant transfer of money.

Answer explanation

A direct debit is a way of making regular payments.

What is the customer provided with when they apply to set up internet banking for the first time?

• Account number and sort code.
• Branch address and telephone number.
• Customer identification name and password.
• Special questions with the answers.

Answer explanation

Customers are provided with a user (or identification) name and password when they first apply for internet banking.

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.

A debit card cannot be used to obtain cash from which of the following?

• A shop.
• An ATM.
• An internet store.
• The customer's bank branch.

Answer explanation

A

A debit card can be used to obtain cash from shops (cashback).

B

A debit card can be used to obtain cash from an ATM.

C

Correct.

D

A debit card can be used to obtain cash from a bank.

Which of the following is always shown on the front of a credit card? The:

• bank's sort code.
• card's expiry date.
• customer's signature.
• CVV.

Answer explanation

A

This is not shown on the card.

B

Correct.

C

This is not shown on the front of the card.

D

This is not always shown on the front of the card.

A credit card cannot be used for:

• making online payments.
• obtaining cash from an ATM.
• paying for items in shops.
• setting up a direct debit.

Answer explanation

A credit card cannot be used for setting up a direct debit.

Karin can purchase items in shops and benefit from an interest-free period, but she would be charged if she withdrew cash from an ATM. What type of card is she using?

• Cash card.
• Credit card.
• Debit card.
• Gift card.

Answer explanation

Karin is using a credit card.

Which of the following statements is correct? A store card is:

• a good method of saving for the future.
• a safe and effective way of storing money.
• like a credit card but is issued by a specific shop.
• usually the cheapest way of borrowing money.

Answer explanation

A

A store card is a way to make payments, not a way to save money.

B

A store card is a way to make payments, not a way to store money.

C

Correct.

D

Store cards tend to have high interest rates.

Which of the following is used to calculate the cost of borrowing money?

• AER.
• APR.
• RPI.
• VAT.

Answer explanation

A

The annual percentage rate (APR) is used to calculate the cost of borrowing.

B

Correct.

C

The Retail Prices Index (RPI) is one measure of inflation.

D

Value added tax (VAT) is the tax added by the government on many purchases.