Miss Patel has received a bank statement for September 2016, as shown in Fig. 1. [Figure 1.0] Use Fig. 1 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] (a) (i) 1 mark for an explanation of cheque entry and 1 further mark for an explanation of overdraft
2. • Cheque 145 debits the account with $250/amount taken from account is $250
3. • This results in an overdraft of $75.00
4. [2] (ii) Valid points include (Any 2 × 1 mark):
5. • A standing order is a bank transaction where the account holder authorises/instructs the bank (1) to debit his account with a set/fixed amount (1) at regular/monthly intervals (1) it is used for payments such as rent/insurance/subscriptions (1)
6. Accept any other relevant points.
7. [2] (iii) 1 mark for identifying cheque 144 as debit entry and 1 further mark for new correct balance
8. Balance at Sept. 26th $900
9. Less Cheque 144 $180 (1)
10. Balance at Sept. 29th $720 (1) or 2 marks for the correct answer
11. [4] (b) Up to 2 marks for an each explanation of how Miss Patel will use it
12. • Miss Patel can use the bank statement to view the latest balance on her account (1) to see if she is in credit/debit (1)
13. • She can also view all the transactions (1) that have taken place over the month (1) to ensure that all are authorised (1) and if there any errors made/shown (1)
14. • She can reconcile the balance shown with her records (1) so that she knows any transactions that have not yet been entered on her bank account (1)
15. • Can be used for tax returns (1) to the government (1)
16. • Can be used as evidence/proof (1) in a court of law (1)
17. • Can be used to apply for a bank loan (1) showing your ability to pay (1)
18. Accept any other relevant points.
19. [2] (c) (i) 1 mark for each advantage stated to a maximum of two advantages
20. • There is instant credit/able to spread payments
21. • Safer to carry money
22. • No need to carry money
23. • Free credit allowed up to at least a month
24. • Can be used in many outlets/countries
25. • Can be used to obtain cash advances
26. • Can have interest free credit on balance transfers
27. Accept any other relevant points.
28. [2] (ii) 1 mark for showing amount as 3% of $300 and 1 further mark for correct calculation
29. 3% interest on balance of $300 (1)
30. = $300 × 3% = $9.00 (1) or 2 marks for correct answer
31. [6] (d) Level 2 (4-6 marks) Has discussed whether or not Miss Patel should use internet banking and branch banking and has given a reasoned opinion (If a candidate has presented a one-sided argument, award 4 marks max.)
32. Level 1 (1-3 marks) Has commented on the use of internet banking and/or branch banking with/without an opinion
33. • Branch banking means going to the branch for many of the transactions, such as setting up standing orders, querying entries on statements and moving amounts between accounts.
34. • Obtaining cash can be done at ATM machines with either branch banking or internet banking.
35. • The advantage of branch banking is the personal service from the teller and the extra security from knowing you are physically in a branch.
36. • Internet banking means all routine transactions not involving cash can be completed on the Internet, although paying in cheques will still have to be completed by post or a visit to the branch.
37. • The main disadvantage of Internet banking is the threat of fraud and Miss Patel must make sure she is very careful when using the Internet.
38. • Using the Internet will save Miss Patel time visiting the branch and will be more convenient.
39. • Some unusual transactions such as paying in cheques or negotiating a loan will still need a visit to a branch, so a combination of both will probably be best.
40. Accept any other relevant points.