Question

Question #1

Banks that issue credit cards generally charge retailers a fee of 2 to 6% of the amount of sale. List reasons why companies are willing to pay these fees.

Question #2

Search the Internet for the annual report of a company of your choice and then answer the following questions.

1. What is the Name of the company?
2. What is the Internet address/ link of the annual report?
3. At the year-end, what is the net amount of its plant assets?
4. What is the accumulated depreciation?
5. Which method of depreciation does the company use?

Answer 1

Solution:1 Reasons why companies are willing to pay these fees

Cost from customers: Since card payments cause an extra cost, the companies recover from card-paying customers that extra cost.

Sign-up Bonuses: Signing up for a credit card can be an excellent way to score a discount for retailers. Often they’ll get a discount on their very next purchase just for signing up. As long as they use their credit card responsibly and pay their balance in full by the end of the grace period, this can be a great way to save.

Discounts & Promos: It’s common for businesses and large company cardholders to get additional discounts or special offers with banks. For example  they be able to take advantage of “additional % off” when they use their card with certain specific banks.

Interest-Free Periods: credit cards sometimes come with an interest-free period. For example, you might not pay a cent of interest over the first six months for when carrying a balance. This can be an excellent way for companies to manage their cash flows.

Solution: 2

Name of the Company : Accenture Inc

Link of the annual report : https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_27/Accenture-Fiscal-2019-Annual-Report.pdf#zoom=50

The net amount of plant assets At the year-end : $1,471,342

Total accumulated depreciation :$ 1,956,029

Method of depreciation : Straight line method