Which of the Following Statements Is NOT True of Credit

question 21

Multiple Choice

Which of the following statements is NOT true of credit cards?

• A)The rate of return to banks from credit card lending is lower than for other bank assets.
• B)Credit cards represent a preauthorized line of credit to borrowers.
• C)The first credit cards to be widely accepted were nonbank travel and entertainment cards.
• D)If bank cardholders don't pay the balance in full every month, they pay a finance charge on the unpaid balance.

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Definitions:

General Ledger

A comprehensive record of all financial transactions of a company, systematically organized by accounts.

Net Income

The remaining earnings of a company following the deduction of all expenses and taxes from its total income.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet.

Liability

A financial obligation or debt owed by a business or individual to others, which requires settlement in the future.