When charging interest on past due accounts, what is true?

When discussing the charging of interest on past due accounts, it is essential to understand that various laws and regulations govern how and when interest can be applied. The correct answer indicates that both statement A and statement C are true, which suggests that specific legal conditions or limitations regarding interest charges are recognized.

Interest on overdue accounts may only be charged if there is a clear contractual agreement between the creditor and debtor that stipulates the terms at which interest can be assessed. Additionally, it is often necessary to comply with state usury laws, which can limit the amount of interest that can legally be charged. If the terms of the contract and applicable state laws are satisfied, it is appropriate for creditors to charge interest on late payments.

Moreover, it is likely that statement C addresses the necessity that these conditions must be communicated clearly to the debtor, reinforcing the legal rights of the creditor while also ensuring that the debtor is aware of their obligations. This transparency can help avoid disputes regarding the amount of interest owed.

In summary, the answer confirms that there are conditions under which charging interest on past due accounts is permissible when backed by contractual agreements and abiding by regulatory guidelines.