Which of the Following Is a disadvantage of Using a Debit

question 21

Multiple Choice

Which of the following is a disadvantage of using a debit card?

• A) The consumer is charged higher finance charges than on a credit card.
• B) The consumer loses float.
• C) They have higher processing costs than ATMs.
• D) They have lower processing costs than checks.
• E) They are not widely available.

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Definitions:

Accruals

Adjustments in accounting for income that has been generated but not yet documented, and for costs that have been accrued but not yet documented.

Working Capital Needs

The funds required to finance the day-to-day operations of a business, including managing its short-term assets and liabilities.

Explicit Interest

The stated interest rate on a loan or financial instrument, not including the effects of compounding or any hidden charges.

Factoring

Financing method where a firm sells its accounts receivables, usually to a specialized financing company, at a discount to their full value.