Victoria received $500 from customers in partial payment for accounting services performed previously. The recording of this transaction would
A) increase Cash and Victoria's Capital $500.
B) increase Cash and decrease Accounts Receivable $500.
C) increase Cash and increase Accounts Receivable $500.
D) decrease Accounts Receivable and increase Victoria's Capital $500.

Question

Quizplus · Accepted Answer

Since Victoria received partial payment for accounting services previously performed, it means that the customers owed her money, which was recorded as Accounts Receivable. Therefore, receiving the payment would decrease the Accounts Receivable balance. At the same time, the payment was received in cash, which would increase the Cash balance. Therefore, the recording of this transaction would increase Cash and decrease Accounts Receivable by $500. It would not affect Victoria's Capital account.

Victoria Received $500 from Customers in Partial Payment for Accounting