Question 3
- State five reasons that would make a bank dishonour a customer’s cheque.
- State five reasons countries introduce restrictions in foreign trade.
Comments
Candidates who attempted this question performed well. However, some candidates mis-used words and spelt some words wrongly.
The expected responses are.
- Reasons a bank would dishonour a cheque
- When the amount written in figures does not correspond to the one in words.
- When the drawer’s signature is different from the specimen captured when the account was opened.
- If the bank has been informed about the demise or insanity of the account holder.
- When a court of competent jurisdiction freezes the account (Garnishee order).
- When the amount on the cheque is greater than the account balance.
- When the owner orders the bank to stop the payment of the cheque.
- If the cheque is not presented within a period of six months.
- If there are alterations without signature.
- If any of the essential features of a cheque is missing. (Date, Signature, Payee)
- If the cheque is mutilated.
- If the cheque is presented before the date written on it/ post-dated.
- Reasons countries introduce restrictions in foreign trade
- Countries restrict trade to protect their home/infant industries from the competition of more advanced industries abroad.
- To enable local industries to expand and employ indigenes.
- Trade restriction, through the use of tariffs generates revenue for governments.
- Countries restrict foreign trade to improve their balance of payment with other countries.
- Foreign trade restrictions are usually employed to preserve a country’s foreign reserves.
- Countries may restrict trade as a retaliatory measure.
- Trade restriction is also used to reduce the demand for specific goods.
- To prevent dumping of goods from more established foreign firms.
- To prevent importation of harmful goods.