Question

Merchants who send you a notice that they have charged your accounts are really communicating that they have:

a) Credited your accounts
b) Debited your accounts
c) Frozen your accounts
d) Closed your accounts

Answer 1

Merchants notifying you of charges to your accounts means they have debited your accounts, indicating that money has been withdrawn as a result of a transaction. Option a) is correct.

Step-by-step explanation:

When merchants notify you that they have charged your accounts, they are communicating that they have debited your accounts. In terms of accounting, a debit to an account means a transaction has occurred where money has been taken out of the account.

Conversely, a credit adds money to an account. When it comes to debit cards, the amount spent using the card is immediately deducted from your checking or savings account. On the other hand, with credit cards, the charge represents a short-term loan provided by the credit card company.

Which you're expected to repay usually by the end of the month. Both means of payment transfer money but in different ways and it's important to note that using more credit cards or debit cards does not alter the total quantity of money in the economy.