How Has the Widespread Adoption of Debit Cards as the Preferred

question 36

Multiple Choice

How has the widespread adoption of debit cards as the preferred method of payment for consumer purchases likely affected bank administration costs?

• A) the cost of bank administration is unaffected by widespread use of debit cards
• B) costs increased due to high cost of developing and maintaining debit card technology
• C) administration costs increased because the cost of electricity means high-cost for electronic transactions
• D) costs are reduced because the cost of purchase is immediately debited from purchaser's checking account

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Definitions:

Cost of Goods Sold

Costs incurred directly from the production of goods a company offers for sale, covering material and labor expenses.

Work in Process Inventory

Goods partially completed during the manufacturing process, consisting of labor, raw materials, and overhead costs incurred to date.

Finished Goods Inventory

The collection of products that have been completed and are available for sale, yet remain unpurchased.

Operating Expenses

Costs that are necessary for the day-to-day functioning of a business, excluding direct material and direct labor costs.