Advanced Packaging accepted a credit card account receivable in exchange for $25,000 of services provided to a customer.The credit card company charges a 4% service charge.What effect on the accounting equation will recording the transaction in the company's accounting records have?

Question

Quizplus · Accepted Answer

The transaction increases assets (accounts receivable or cash) by $24,000, which is the $25,000 worth of services minus the 4% service charge ($1,000). Shareholders' equity also increases by $24,000 due to the revenue from services provided.

Advanced Packaging Accepted a Credit Card Account Receivable in Exchange