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Superior Carpet Cleaning provided $76,000 of services during 2013 its first year of operations. all customers paid for the services with major credit cards. Superior submitted the credit card receipts to the credit card company immediately. The credit card company paid superior cash in the amount of face value less a 3 percent service charge.
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Why would superior carpet cleaning accept credit cards instead of providing credit directly to its customers? In other words, why would superior be willing to pay 3 percent of sales to have the credit card company handle it sales on account?
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