Final answer:
The credit card service provider deposits the sale amount into the business's account after deducting a service fee, causing differences between the bank and book balances. Credit cards provide an immediate transfer of funds acting as a short-term loan, and banks facilitate economic transactions by offering secure account storage and payment options.
Step-by-step explanation:
Regarding the question of how accepting payments by credit card causes significant differences between bank and book balances, the correct answer is that the credit card service provider typically deposits the sale amount in the business's account after deducting a service fee, which is option C. This fee leads to disparities between the recorded (book) balance and the actual money received (bank balance). A credit card functions as a short-term loan from the credit card company to the cardholder, with funds being transferred immediately to the seller's account. It contrasts with a debit card, directly connected to the user's bank account, using existing funds without offering a loan or credit.
Banks play a crucial role in facilitating transactions within the economy, acting as financial intermediaries and providing convenience and security that carrying and using cash for all transactions would not afford. They allow businesses to accept various payment methods, which is essential for contemporary financial transactions. However, the intricacies of credit card transactions, including the service fees charged by the providers, add an additional layer of financial management for businesses to consider when reconciling their accounts.