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The Yankee Corporation has recently begun to accept credit cards. On July 7, Year 1, Yankee made a credit card sale of $600. The credit card company charges a fee of 3% for handling a credit card transaction.

-Which of the following 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 following information applies to the questions displayed below.]

The Yankee Corporation has recently begun to accept credit cards. On July 7, Year 1, Yankee made a credit card sale of $600. The credit card company charges a fee of 3% for handling a credit card transaction.

-Which of the following 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

Quizplus · Accepted Answer

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

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