Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Credit card companies make the most profit from which of the following sources?

Promotional offers and discounts

Cash-back rewards paid to customers

Annual membership fees

Interest charges on outstanding balances

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Verified step by step guidance

Understand the revenue streams of credit card companies: Credit card companies generate income from various sources, including interest charges, annual fees, transaction fees, and promotional offers.

Focus on the concept of interest charges: Interest charges are applied to outstanding balances when cardholders do not pay their full balance by the due date. This is typically the largest source of revenue for credit card companies.

Compare the other options: Promotional offers and discounts are marketing strategies to attract customers, not direct profit sources. Cash-back rewards are expenses incurred by the company to incentivize spending. Annual membership fees contribute to revenue but are generally smaller compared to interest charges.

Recognize the significance of interest charges: Interest rates on credit cards are often high, and many cardholders carry balances month-to-month, leading to substantial income for credit card companies.

Conclude that interest charges on outstanding balances are the primary source of profit for credit card companies, as they consistently generate significant revenue compared to other sources.