Means of payments. - SS3 Commerce Past Questions and Answers - page 1
Which means of payment involves using physical currency in the form of coins and banknotes?
Cash
Credit
Payment in arrears
What is the primary characteristic of credit as a means of payment?
Immediate settlement of debt
Borrowing money for future payment
Payment made after receiving goods or services
What does payment in arrears refer to?
Settling debt with physical currency
Immediate payment for goods or services
Deferred payment after receiving goods or services
Which form of payment is widely recognized as legal tender?
Banknotes
Credit cards
Digital wallets
What are coins primarily used for?
Higher value transactions
Borrowing money
Smaller value transactions
Explain the concept of credit as a means of payment.
Credit allows individuals or businesses to obtain goods or services with the promise of paying back the borrowed amount at a later date. It involves borrowing money from a lender and repaying the debt within a specified timeframe.
What is the significance of legal tender in means of payment?
Legal tender refers to the official form of payment recognized by the government. Coins and banknotes issued by the government are widely accepted as legal tender, ensuring their acceptance and usability in transactions within a country.