Thompson Manufacturing sold inventory to a customer for $400.The customer used a VISA bank card,which charges Thompson a 3% fee.The company uses the periodic inventory system.What asset results from this sale?

Question

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The company received $400 as payment from the customer. However, since the customer used a VISA bank card, Thompson must pay a 3% fee to the bank for processing the transaction. Therefore, Thompson will only receive $400 x 0.97 = $388 in cash. Since the company uses the periodic inventory system, the asset that results from this sale is cash. Therefore, the correct answer is C - Cash of $388.

Thompson Manufacturing Sold Inventory to a Customer for $400