Which of the following is a disadvantage of credit cards?

• A. They guarantee that all transactions are error-free.
• B. They can lead to increased risk of fraud if not properly monitored.
• C. They always require immediate payment in cash.
• D. They eliminate the need for any internal controls.

Answer: (B)

Verified step by step guidance

1. Understand the context of the question: The problem is asking about disadvantages of credit cards, which are financial tools used for transactions and payments.
2. Analyze each option provided: Evaluate whether each statement accurately describes a disadvantage of credit cards.
3. Option 1: 'They guarantee that all transactions are error-free.' This is incorrect because credit cards do not guarantee error-free transactions; errors can occur due to technical issues or human mistakes.
4. Option 3: 'They always require immediate payment in cash.' This is incorrect because credit cards allow deferred payment, not immediate cash payment.
5. Option 4: 'They eliminate the need for any internal controls.' This is incorrect because internal controls are still necessary to monitor and manage credit card usage effectively. The correct answer is Option 2: 'They can lead to increased risk of fraud if not properly monitored,' as credit cards are susceptible to fraud if not carefully managed.