General Lighting ​

question 178

Multiple Choice

General Lighting
​
During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.
-Refer to General Lighting. When the company records this transaction, what is the impact on the accounting equation?

• A)Both assets and liabilities decrease.
• B)Assets decrease and liabilities increase.
• C)Assets, liabilities, and stockholders' equity will all increase.
• D)Assets increase and stockholders' equity decreases.

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Definitions:

Holder in Due Course

A party that has acquired a negotiable instrument in good faith and without notice of any defect in title.

Maker

The individual or entity that creates or produces an item or is the original writer of a check or promissory note.

Without Recourse

A term indicating that the holder of a financial instrument cannot demand payment from the issuer in the case of default.

Banking Day

A business day during which financial institutions are open for business with the public.