When a customer makes purchases with a national credit card the retailer?
Sophia Koch
Updated on February 13, 2026
When the customer pays the retailer using a credit card, the retailer receives the amount from the bank after deducting the transaction fees. However, the actual amount is paid to the bank on the future date by the customer. It is the most common form of consumer credit.
Why do sellers allow customers to use credit cards?
Sellers allow customers to use credit cards for all of the following reasons except: To be able to charge more due to fees and interest. To lessen the risk of extending credit to customers who cannot pay. To avoid having to evaluate a customer’s credit standing for each sale.
Is the legal right to receive cash from a credit sale and represents an asset of the company?
Cards In This Set
| Front | Back |
|---|---|
| Trade Receivable | The legal right to receive cash from a credit sale and represents a asset to a company |
| Interest on a note calculation? | Face amount x annual rate x fraction of annual period |
| Receivables turnover formula? | Net credit sales / average accounts receivables |
What is bad debt expense considered?
What Is a Bad Debt Expense? A bad debt expense is recognized when a receivable is no longer collectible because a customer is unable to fulfill their obligation to pay an outstanding debt due to bankruptcy or other financial problems.
How do sellers benefit from allowing their customers to use credit cards?
How do sellers benefit from allowing their customers to use credit cards? Companies permit their customers to use third party credit cards such as Visa, Master card or American Express to make payments for their products or services. This helps companies to increase their sales revenue and profits.
How do sellers benefit from allowing their customers to use credit cards How are credit card transactions recorded?
Sellers benefit from allowing their customers to use their credit cards, because it allows the sellers to receive full payment because once credit is established with a credit card company or bank, the customers does not have to open an account with each store.
At what amount are accounts receivable recorded?
Accounts receivable are reported at net realizable value. That is the amount of cash that is expected to be collected from those accounts. Ace Company will report its “net accounts receivable” on the balance sheet as $960,000.
