If a Company Made a $5,500 Credit Card Transaction and the Credit

question 40

Multiple Choice

If a company made a $5,500 credit card transaction and the credit card discount was 4%, what is the correct entry to accounts receivable?

• A) Dr. Accounts Receivable $5,720
• B) Dr. Accounts Receivable $5,280
• C) Cr. Accounts Receivable $5,720
• D) Cr. Accounts Receivable $5,280

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Definitions:

Insurable Interest

Insurable Interest is a principle requiring that a person purchasing insurance has a stake in the safety and protection of the insured object or individual against loss or damage.

Fraud

Fraud refers to wrongful or criminal deception intended to result in financial or personal gain.

Good Faith

Acting with honesty and sincerity without intention to deceive or defraud in a legal or transactional context.

Subrogation

The process by which an insurance company, having paid a loss to its insured, acquires the legal right to pursue any claims the insured may have against a third party responsible for the loss.