College Accounting 2nd Edition by David Haddock, John Price,Michael Farina

Exercise 4

Suppose you are the accountant for a small chain of clothing stores. Up to now, the firm has offered open-account credit to qualified customers but has not allowed them to use bank credit cards. The president of the chain has asked your advice about changing the firm's credit policy. What advantages might there be in eliminating the open-account credit and accepting bank credit cards instead? Do you see any disadvantages?