Observation

Candidates performed well in this question.  However, some candidates stated the quality of money for function of money.

The expected responses to the question include:

(a)        Functions of money:

                        (i)         It is used as a medium of exchange;
(ii)        It serves as a standard of deferred payment.  Goods can be bought on credit and payment made in a month’s time;

1. Unit of Account:  Money serves as a standard and numerical unit of measurement of market value of goods and services;
2. It serves as a store of value which enables money to be kept for use in future.

            (b)        Advantages of payment by cheque:

                        (i)         It minimizes the use of cash in settling indebtedness;
(ii)        If a cheque is lost, it is easier to trace than when cash is lost;
(iii)       It is more convenient to move about with cheque than cash;
(iv)       The drawer of a cheque can stop payment before it is cashed;
(v)        Cheque stubs serves as receipt which help the drawer to keep records of payment;
(vi)       Postdated cheque serves as means of deferred payment;
(vii)      Cheques can be made out for any amount;
(viii)     Payment by cheque saves time and energy in counting cash;
(ix)       The parties to the transaction need not meet since cheques can be sent by post;
(x)        It is more secured to move around with cheques than cash.