Ravi is a self-employed bicycle repairer. He receives small cash payments from customers but also needs to pay for spare parts by bank transfer. His bank of...
Question 1 Report
Ravi is a self-employed bicycle repairer. He receives small cash payments from customers but also needs to pay for spare parts by bank transfer. His bank offers a basic business account, a deposit account and a personal savings account.
(a) Identify the most suitable account for Ravi's repair business. [1]
(b) State two services Ravi could use with this account. [2]
(c) Give one reason why Ravi should keep business money separate from his personal money. [1]
Answer Details
(a) Ravi needs a basic business account, also called a business current account. It is designed for daily business receipts and payments. [1]
(b) He could receive bank transfers from customers and make bank transfers to spare-parts suppliers. Depositing cash, using a debit card, internet banking, and paying suppliers by direct debit are also acceptable services. [2]
(c) Keeping money separate makes the business records easier to check and helps Ravi calculate business profit and prepare tax records accurately. [1]
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