A Benefit of Using Credit Cards Is That They

question 215

Multiple Choice

A benefit of using credit cards is that they

• A) have lower interest rates than other forms of credit.
• B) provide a record that makes it possible to keep track of purchases easily.
• C) help consumers be more disciplined when it comes to spending decisions.
• D) allow the consumer to spread out payments and reduce overall costs.

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Definitions:

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.

Depreciation Expense

Depreciation expense is the allocated reduction of the cost of a tangible fixed asset over its useful life, reflecting its wear and tear, or obsolescence.

Net Loss

The amount by which a company's expenses exceed its revenue over a specific period, indicating negative profitability.

Supplies on Hand

The value of supplies that have not yet been used by the company, classified as a current asset on the balance sheet.