The Yankee Corporation has recently begun to accept credit cards. On July 7, Yankee made a credit card sale of $600. The credit card company charges a fee of 3%. Which of the following answers correctly describes the effect of the collection of cash from the credit card company on the financial statements of Yankee Corporation?

A) Option A
B) Option B
C) Option C
D) Option D

Question

The Yankee Corporation has recently begun to accept credit cards. On July 7, Yankee made a credit card sale of $600. The credit card company charges a fee of 3%. Which of the following answers correctly describes the effect of the collection of cash from the credit card company on the financial statements of Yankee Corporation?
The Yankee Corporation has recently begun to accept credit cards. On July 7, Yankee made a credit card sale of $600. The credit card company charges a fee of 3%. Which of the following answers correctly describes the effect of the collection of cash from the credit card company on the financial statements of Yankee Corporation? A) Option A B) Option B C) Option C D) Option D

A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

Collecting the amount due ($582) from the credit card company increases assets (cash) and decreases assets (accounts receivable - credit card), resulting in no net effect on assets. It is reported as a cash inflow for operating activities.

The Yankee Corporation Has Recently Begun to Accept Credit Cards