Establishing Customer Files and Transactions

Understanding Transactions After Establishing Customer Files

Once a customer file is established, transactions can include ________.
1) sending invoices to and receiving bills from customers.
2) sending an invoice to a customer and receiving cash from a customer's purchase.
3) sending an invoice to a customer, paying that invoice, and writing checks.
4) receiving a bill from a vendor, paying that bill, and paying for a cash purchase.

Final answer:

Transactions following the establishment of a customer file often include sending invoices and receiving payments through various banking tools such as checking and savings accounts. Hence, option 2) is correct.

Explanation:

Once a customer file is established, transactions can include 2) sending an invoice to a customer and receiving cash from a customer's purchase. This is the most common transaction for businesses once they have established a relationship with a customer. Banks play a crucial role in facilitating these transactions. They offer tools like checking accounts and savings accounts, where businesses can deposit the received cash. Customers can use checks or debit cards linked to these accounts to make payments, which the bank processes, transferring funds from the customer's account to the business's account.

Businesses can also use banks to handle other financial transactions, such as paying workers, through direct withdrawals or writing checks. In terms of accessing money, the lines between checking and savings accounts have blurred, with many banks offering hybrid accounts. An overdraft happens when a check is written or a charge is made without sufficient funds in the account, which can result in fees and the need for immediate repayment to the bank.