Alberta Company accepts a credit card as payment for $450 of services provided for the customer.The credit card company charges a 4% fee for handling the transaction.How does this this transaction affect the elements of the financial statements?

Question

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The sale increases assets (accounts receivable - credit card company) and stockholders' equity (retained earnings) by $432 [or ($450 ? ($450 × 4%)]. It increases revenue by $450, increases expenses (credit card expense) by $18 (or $450 × 4%), and increases net income by $432 (or $450 ? $18). The statement of cash flows is not affected.

Alberta Company Accepts a Credit Card as Payment for $450