http://www.cbc.ca/news/background/personalfinance/creditcards.html
Summary
The usage of credit cards by Canadians over the last few years have been steadily increasing and have now reached the point where over 50 million Visa and MasterCards exists within our wallets. Not only so, 24 million retail credit cards have also found its way into consumer's pockets by means of enticing offers of discounts when you apply for their card. With most stores accepting the source of payment by means of a plastic card, there are drawbacks to extensively using them. Credit cards most oftenly come hand in hand with interest and not paying on time simply increases that interest rate.Not only so, the option of paying the minimum amount only increases the debt. So why do Canadian have so many credit cards? Simple, they are easy to apply for and are a great way to pay off debt at a later date, especially when your paycheck has not yet arrived.
Connection
As many of us know, a visit to the bank to deposit money or withdraw money, the bank charges certain fees for helping you accomplish such a task. With credit cards, it is the same. Cardholders are charged transaction fees and annual fees and most importantly, interest on overdue payments. Interest rates vary from store to store and sometimes bank to bank but this is what takes a toll on the consumers, especially for people who do not take note of their bills when they arrive but when the stack of mail blocks out the light. It is often too late at that point to pay off their balances without interest and as a result, hefty interest rates. If this does not stop, it only becomes a cycle. On an even darker note, not paying your fees on time leads to bad credit history and may eventually be the reason for credit card companies to disallow you from applying for their card.
Reflection
I understand why individuals prefer to not pay in cash for cash is easy to lose and unconveinent to carry in large amounts. On the other hand, it's conveinent for small grocery shopping payments and if we were to live in a world where there is no cash, we will still encounter scams, losses, and so on just like we do today. Currently, microchips are being installed into credit cards to decrease the number of frauds, but technology can be fickle. Once an individual figures out how to access these new cards, they will spread the news and consumers will be back to base one. I don't think cash should be completely eliminated from means of payment, but what I do think is people should consider when to use a credit card and when to use cash.
Friday, November 21, 2008
Sunday, October 26, 2008
Chpt 12 Specialized Journals
http://www.cbc.ca/consumer/story/2008/10/23/f-cautiousconsumer.html
Summary
As of last week, the Canadian dollar had fallen to $0.79 U.S. dollars, meaning the Canadian dollar is no longer worth as much as it previously was. With Christmas being only 2 months away, the decreasing value of the dollar is of bad timing. On the other hand, many retail stores will not increase their prices for stocks have already been pre-ordered and have a locked price. Not only so, some retailers may even drop their prices even more by the use of discounts due to the lack of consumer confidence. If the Canadian dollar continues to drop, consumers will be able to take advantage of the reduced prices longer, but even if the value of the dollar does climb back up, prices will not immediately increase.
Connection
When prices soar, discounts are often given out to ease the financial difficulties some individuals face. With this chapter focusing on specialized journals, discounts are recorded in the Discounts Earned account (for the customer) and/or the Discounts Allowed account (for the retailer). While most discounts found in clothing stores or local supermarkets just cut back on the price of the item, there are discounts given when payments are made before its due date. Such discounts have terms that must be met before the discount is in affect. An example would be a discount of 1% when the payment is made within 15 days of the invoice.
Reflection
Giving customers the advantage of using discounts is a great idea and it is also a win-win situation. The customer can save money and the retailers can still gain a fair amount of profit at the same time. When the use of discounts is available, fewer individuals will travel over to the United States to shop and as a result, this could provide some cushioning in the economic recession Canada seems to be falling into. Ovetime, I believe the value of our dollar will increase back to a higher amount and prices will increase as well. How much and when, no one knows but hopefully not too much. No one likes to pay a higher price for the same item.
-Betty Chan
Summary
As of last week, the Canadian dollar had fallen to $0.79 U.S. dollars, meaning the Canadian dollar is no longer worth as much as it previously was. With Christmas being only 2 months away, the decreasing value of the dollar is of bad timing. On the other hand, many retail stores will not increase their prices for stocks have already been pre-ordered and have a locked price. Not only so, some retailers may even drop their prices even more by the use of discounts due to the lack of consumer confidence. If the Canadian dollar continues to drop, consumers will be able to take advantage of the reduced prices longer, but even if the value of the dollar does climb back up, prices will not immediately increase.
Connection
When prices soar, discounts are often given out to ease the financial difficulties some individuals face. With this chapter focusing on specialized journals, discounts are recorded in the Discounts Earned account (for the customer) and/or the Discounts Allowed account (for the retailer). While most discounts found in clothing stores or local supermarkets just cut back on the price of the item, there are discounts given when payments are made before its due date. Such discounts have terms that must be met before the discount is in affect. An example would be a discount of 1% when the payment is made within 15 days of the invoice.
Reflection
Giving customers the advantage of using discounts is a great idea and it is also a win-win situation. The customer can save money and the retailers can still gain a fair amount of profit at the same time. When the use of discounts is available, fewer individuals will travel over to the United States to shop and as a result, this could provide some cushioning in the economic recession Canada seems to be falling into. Ovetime, I believe the value of our dollar will increase back to a higher amount and prices will increase as well. How much and when, no one knows but hopefully not too much. No one likes to pay a higher price for the same item.
-Betty Chan
Wednesday, September 24, 2008
Ch.11: Accounting for a Merchandising Business
Summary
http://www.canada.com/vancouversun/news/business/story.html?id=32ee0fc9-50e9-49ef-883b-1fdffd36ff63&p=1
Connection
As debt builds up, not only do individuals involved in the stock market crash suffer, but so do individuals like us and businessmen as well. Prices will gradually but consistently increase and customers will have to pay more for the same items and business owners would have to increase the salary they pay to their workers for the price of living will have skyrocketed. Owners of trade companies will endure one of the worst sufferings since Canada has strong trade routes going to the U.S. and no longer will they be able to purchase our items. As it is expensive to store products for a long period of time, the value of the items will not be worth its original price and therefore cost the proprietor. In some cases, proprietors would lose even more money because when business is not up to where it should be, money is spent on advertising expenses to sell the product to gain more customers. In the end, revenue (particularly COGS) will not increase whereas expenses will, something any business or accountant should hope not to encounter.
http://www.canada.com/vancouversun/news/business/story.html?id=32ee0fc9-50e9-49ef-883b-1fdffd36ff63&p=1
Everywhere we go we hear about the United States' economic crisis and how it affects Canadians. As Canada gets nearer and nearer to falling into a recession, this has a huge effect on our economy. In fact, it seems to be that we are already in a recession. The number of jobs that presently exists will decrease because money will be even harder to come by, especially jobs that relate to the export of products from Canada. Since this crisis is a global issue, many European countries as suffering as well. Luckily, experts expect this recession to end by early 2009, but this can have devasting effects on the global scale.
Connection
As debt builds up, not only do individuals involved in the stock market crash suffer, but so do individuals like us and businessmen as well. Prices will gradually but consistently increase and customers will have to pay more for the same items and business owners would have to increase the salary they pay to their workers for the price of living will have skyrocketed. Owners of trade companies will endure one of the worst sufferings since Canada has strong trade routes going to the U.S. and no longer will they be able to purchase our items. As it is expensive to store products for a long period of time, the value of the items will not be worth its original price and therefore cost the proprietor. In some cases, proprietors would lose even more money because when business is not up to where it should be, money is spent on advertising expenses to sell the product to gain more customers. In the end, revenue (particularly COGS) will not increase whereas expenses will, something any business or accountant should hope not to encounter.
Reflection
With such a global disaster surfacing, I cannot help but wonder why the Americans did not have a backup plan of any sort for a sufficient government should have limits on how much money is spent on certain aspects of a country. At the present moment, our Canadian government has ensured Canadians that we will not fall as deeply as our American neighbours but in some cases, we are even worse. On the other hand, without the U.S. using as much money to finance their operations, countries around the world could possibly benefit from this issue. Only time can tell what will become of this situation and whether companies will make it through this time of little revenue.
Betty Chan
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