Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 8 - Reporting and Analyzing Receivables - Questions - Page 427: 20


Advantages of accepting both type cards: The company may accept its own credit cards and national credit cards. The advantage for accepting both the cards are – The credit cards are issued by the company, to its customers only after 100% verification of their credit rating. This ensures timely collections and no outstanding beyond the credit period allowed.

Work Step by Step

By accepting the National credit cards, company gets the payment almost immediate, after making the sales. This payment is made by the credit cards companies, who charge a small fee. Credit card companies collect the payments from customers on or after the due date. In this process the company has the advantage of immediate availability of cash and no bad debts.
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