Select the Entry That Correctly Records the Receipt by Speedy

question 45

Multiple Choice

Select the entry that correctly records the receipt by Speedy Window Cleaning of $770 (including GST) collected from its customer Alan Lim for goods previously sold to him on credit.

• A) Debit bank $770; credit income earned $700; credit GST collections $70
• B) Debit debtors $770; credit income earned $700; credit GST collections $70
• C) Debit debtors $770; credit bank $770
• D) Debit bank $770; credit debtors $770

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Definitions:

Assumption of the Risk

A legal theory in personal injury cases where the plaintiff is considered to have voluntarily accepted a known risk associated with an activity or condition, possibly limiting the defendant's liability.

Comparative Negligence

A principle of tort law that compares the negligence of the conflicting parties and apportions damages accordingly.

Res Ipsa Loquitur

A Latin term that means "the thing speaks for itself," used in tort law to refer to cases where the negligence is inferred from the nature of the accident.

Actual Cause

The true reason an event occurred, which directly led to the damage or injury, forming a basis for establishing legal liability.