Question 1

Which of the following payment method experienced the largest decrease in the 2000s?

Accepted Answer

Paper checks experienced the largest decrease in usage during the 2000s as electronic payment methods became more prevalent and convenient for both consumers and businesses.

Question 2

Examples of payment brands include the following except:

Accepted Answer

American Express, VISA, Mastercard, and Discover Card are all examples of payment brands typically associated with credit and debit card services. PayPal, on the other hand, is an online payment system that acts as an alternative to traditional paper methods like checks and money orders, making it distinct from the traditional payment brand category.

Question 3

In the case of credit cards, the risk to the issuing banks include:

Accepted Answer

D

Question 4

Variable costs of card processing include

Accepted Answer

Interchange fees, assessment fees, and markups are all variable costs associated with card processing. These fees can vary depending on the transaction, the type of card used, and the merchant's agreement with the card processor.

Question 5

Interchange fees may be affected by the following factors except

Accepted Answer

Interchange fees, which are fees paid between banks for the acceptance of card-based transactions, are typically influenced by factors such as the physical presence of the card during the transaction, the amount of customer information provided, the type of business as categorized by the merchant category code, and the type of card used (e.g., credit, debit, rewards). However, whether a business owns or rents the card reader does not directly affect interchange fees. These fees are more closely related to transaction security, the likelihood of fraud, and the cost of processing transactions, rather than the ownership status of the hardware used to process the payments.

Question 6

Payment Card Industry Data Security Standard (PCI DSS) is determined and monitored by

Accepted Answer

The PCI Security Standards Council, an independent body created by major payment card companies, is responsible for the development, enhancement, storage, dissemination, and implementation of security standards for the protection of cardholder data. Individual payment brands also play a role in enforcing compliance among merchants and service providers.

Question 7

Having a formal credit screening process

Accepted Answer

A formal credit screening process shows customers that a company is serious about managing credit risk, which reflects professionalism.

Question 8

The perpetual inventory system and the periodic inventory system are

Accepted Answer

The perpetual and periodic inventory systems are methods used to determine the quantities of inventory. The perpetual system continuously updates inventory records, while the periodic system updates records at specific intervals.

Question 9

Inventory valuation methods include

Accepted Answer

All the options listed (LIFO, FIFO, average cost, and specific identification) are recognized inventory valuation methods used in accounting to determine the cost of goods sold and ending inventory value.

Quiz 5: Cash and Working Capital Management