Consumer Choices - Payment Choices

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Consumer Choices - Payment Choices. Stage 5 Commerce. Payment choices. Students learn about: Methods of payment. Cash, credit, cheque, direct debit, lay-by, electronic funds transfer, book up. Methods of keeping records. Changes over time and the impact of technology. Payment choices. - PowerPoint PPT Presentation

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Consumer Choice Commerce and Choice

Consumer Choices - Payment ChoicesStage 5 CommerceStudents learn about:Methods of payment.Cash, credit, cheque, direct debit, lay-by, electronic funds transfer, book up.Methods of keeping records.Changes over time and the impact of technology.

Payment choicesStudents learn to:Identify the criteria that should be considered when determining methods of payment for different suppliers.Research the criteria to determine the most appropriate methods of payment in a range of contexts.Identify the advantages and disadvantages of book up.Propose options that could be taken to improve financial services available to Aboriginal and Torres Strait Islander peoples and remote communities.Develop and use spreadsheets and databases to maintain effective records and monitor monthly transactions including running totals of cash, direct debit and credit purchases.Identify how technology has impacted on the payment process of businesses and consumers.

Payment choicesCash money in coins and notes

Credit money loaned at a point in time to complete a purchase with the intention it is paid back with interest or extra fees.

Direct debit A prescribed amount of money taken directly from your bank account on a regular schedule to pay another company or bank account

Lay-by a service that allows you to purchase goods when you do not have the money to buy them upfront.

Electronic funds transfer (EFPTOS) all types of financial transactions that are carried out electronically.

Methods of payment

Cash

Credit

Advantages and disadvantages of cash and creditAdvantagesDisadvantagesImmediate payment is possibleA bulky way to pay for expensive thingsAll shops acceptNot very secureAdvantagesDisadvantagesMoney stays in the bank earning interest until you pay your bill.Easy to overspend and get caught in a debt trapSafer. Can be cancelled if lost.Can have high interest so should be used with cautionCheques

Direct debits

Advantages and disadvantages of cheques and direct debitsAdvantagesDisadvantagesConvenient and easy to use.Some retailers do not accept.Added security can be stopped when lost.When deposited into an account you need to wait for it to be cleared.AdvantagesDisadvantagesA convenient way to pay for household services.You need to have sufficient funds in your account to cover.Can be paid regularly automatically.Amounts paid may not always be the same.Lay-by

Electronic funds transfer

Advantages and disadvantages of lay-by and electronics funds transferAdvantagesDisadvantagesNo interest charges.Buy goods not needed.Protects you against future increases in the price of the product.Good must stay in the store until full payment has been made.AdvantagesDisadvantagesCash free so minimises security concerns.Significant increases in fraud cases recently.Widely accepted.Allows personal information to be passed onto others.Use the ASIC booklet on book up or go to www.fido.asic.gov.au . Click on Financial Tips, then Loans and Credit.

Research to what book up is and where it is practicedDiscuss its ethical and legal implications.

Book up activity

Buying a newspaperPaying for a haircutPaying the monthly electricity billPurchasing a formal dressPaying for a carBuying groceriesPaying your bus farePaying off a mortgage (housing loan) or personal loan.Determine the most appropriate payment method for each situation

Services for indigenous Australians and remote communitiesRead the yellow box.

Brainstorm and develop a mind map showing measures that could be used by industry, government and indigenous organisations to improve the banking services available to these people in remote areas.

Compare the amounts on withdrawals, cheques and deposits with the amounts on your receipts or cheque butts. Check off all canceled cheques and deposits.Insert the last balance shown on your bank statementAdd deposits.Deduct all cheques and withdrawals.Your adjusted balance should agree with the balance in your record book. If it doesnt check your addition and subtraction, then check to be sure you have entered all the numbers correctly.

How To Check A Bank Statement And Balance Your Bank AccountSample Bank Statement

Activity Complete the Bank ReconciliationDateDetailsDepositsWdlsBalance28/09/04O/Bal405.9301/10/04590.9303/10/04298.6407/10/04100.0012/10/04154.0015/10/0458.9017/10/04230.0021/10/04127.8023/10/04450.0026/10/04240.0027/10/04127.8028/10/0445.7529/10/0424.3030/10/04C/BalThere are several financial statements that are normally prepared by businesses. The most common ones are:The profit and loss statementThe balance sheet.The cash flow statement

Financial Statements

The profit and loss statement tells owners the differencebetween revenue (income) and expenses for a periodof time and whether they have made a profit or loss.

The Profit and Loss Statement

The balance sheet is like a set of scales that weighs the assets on one side and liabilities and owners equity on the other. Owners equity is basically what the business owes its owners.The Balance Sheet

A cash flow statement summarise the details contained in a cash book.It summarises the inflows (income or deposits) and outflows (cheques or withdrawals) during a period of time. This whenadded to the bank balanceat the start of the periodenables the bank balanceat the end of the period to be determined.The Cash Flow Statement

Cash ReceiptsLess Cash Payments = Cash surplus (deficit)Add Bank Balance (start of period) = Bank Balance (end of period)

DateItemAmount $April 1Received cash from Joe Blow40April 3Paid electricity bill200April 4Received cash from Y Xeric20April 5Received cash from L Montague80Paid wages to G Jones250April 6Received donation from A Smith100April 7Paid Telstra (phone bill)350April 8Received payment from A Sims450April 9Received cash from L Hewitt400April 10Paid Energy Australia (Electricity bill)50April 13Received cash from M Forces200April 14Paid Telstra (phone bill)80April 25Received donation from J Walker100April 26Paid wages to G Jones250Activity - use this information to complete a cash flow statementDefinition an estimate of income and expenses for a set period of time.Reasons for making a budgetTo track money when you are working to a plan.To work out how to best use the money you earn.To plan for your changing needs and wants.

Budgets

Go to https://www.moneysmart.gov.au/managing-your-money/budgeting/how-to-do-a-budget Use the budget-planner document on SIMB to help plan out a budget for your householdYou can start in class and finish for homeworkHow To Create A BudgetUsing the steps below and other relevant internet sites, develop a brochure for teenagers on the steps in budgeting.

Determine money coming in (income).

Work out your fixed and variable expenses.

Write down your weekly cash flow.

Work out how much you can save.

Identify how to cut back.

Develop a cost benefit analysis to work out how to save for new wants.

Shop around to find the best deal for the goods and services you need and want.

Choose a suitable bank account.

Learn how to record your pay slip.

Decide how to keep records.

Develop a weekly, monthly and annual budget.

Monitor and change your budget at least once a month.

Activity

Self-checkout Supermarkets

ActivityDescribe how a self-checkout works.Outline the advantages and disadvantages of self-checkout supermarkets.

Technology in retailing and payment options is continually developing and changing. Recent developments include:Online and internet shoppingEFTPOS and debit and credit cardsSmart cardsSelf-checkout supermarkets

ActivitiesDevelop a collage in word of recent technological developments in retailing.Use Microsoft publisher or word to create a newspaper article titled Shopping in 2050. Include words and illustrations.Changes over time and the impact of technology