More companies are cutting eliminating the acceptance of check payments from their business plans. According to Karen Aho, Whole Foods Markets, Fresh & Easy, and Banana Republic (a brand of Gap, Inc.) are just a few of the companies that refuse checks as payment from customers. According to the Federal Reserve, paying by check has declined by 6.4% since 2003. Financial services consultant, like James Neckopulos, believe that checks will be a thing of the past in 10 years.
- The article talks about how “paper costs money.” What are these costs associated with taking checks and where would they be accounted for on the financial statements?
- Are there any costs associated with accepting credit card payments from customers? If so, how are these recorded in journal entries?
- While some companies cite faster check-out lanes as an advantage of no-check policies, what are the financial advantages of accepting only cash, credit cards, or debit cards? What are some of the disadvantages in terms of customer relations?
- Are payments by check reported separately on financial statements? If not, then where?
Aho, K. (2009). Still Use Checks? Join the Dinosaurs. MSN.Money (Retrievable online at