Elliston Company accepted credit card payments for $10,000 of services provided to customers. The credit card company charges a 3% service charge. This transaction would increase:
A) revenue by $9,700.
B) assets by $10,000.
C) Retained Earnings by $9,700.
D) net income by $10,000.

Question

Quizplus · Accepted Answer

The credit card sale increases assets by $9,700 (accounts receivable - credit card), increases revenue by $10,000, and increases expenses by $300. This increases net income and equity (retained earnings) by $9,700.

Elliston Company Accepted Credit Card Payments for $10,000 of Services