The Cash Book - Banking - Current Accounts

5 important questions on The Cash Book - Banking - Current Accounts

What is the purpose of a bank?

It helps to make financial transactions between individuals and businesses easier and more convenient.

Explain what a deposit account means.

Deposit Account is an account to which money is paid with the intention of leaving it in the bank for a period of time.
The bank pays interest on amounts invested in deposit accounts.

What is a current account?

This is type of account most used by businesses which payments are made, and into which receipts are lodged.
This is a service provided by a bank which allows customer to continue to make with drawals from an account even when there is not enough money in the account to cover them.
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Can you elaborate the meaning of LOAN ACCOUNTS?

Loan accounts are the accounts where  a specific amount of money is loaned to an individual or business.
The loan is usually long term (say, 3 or 5 years) for a set period and interest is paid to the bank by the borrower.

What is the main advantage of using CURRENT ACCOUNTs?

The facility to receive and pay money without the need to store and transport large sums of cash.

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