1. Basic Bank Services Bank account Bank deposits and cheques Electronic funds transfer Bank credit card transactions Debit card transactions 1 © 2013 McGraw-Hill Ryerson Limited. Banking Activities as Controls LO 5

2. Many companies allow customers to use bank credit cards for their purchases. The risk of bad debts is transferred to the credit card company. The company collects cash from the sale quickly. The credit card companies charge a fee to the vendor. 2 © 2013 McGraw-Hill Ryerson Limited. Credit Card Transactions LO 5

3. TechCom has $100 of credit card sales with a 4% fee and cash is received immediately (assume cost of sales is $40). 3 © 2013 McGraw-Hill Ryerson Limited. Illustration-Credit Card Transaction LO 5

4. Many companies allow customers to use debit cards for their purchases. The bank transfers funds from the customer’s account to the vendor’s bank account. The bank charges a fee to the vendor. The entries are identical to a bank credit card sale. 4 © 2013 McGraw-Hill Ryerson Limited. Debit Card Transactions LO 5