Use the Five Transactions for Hennigan Company Described Below to Answer

question 20

Multiple Choice

Use the five transactions for Hennigan Company described below to answer the question(s) that follow(s) . Dec 1 Hennigan purchases two new saws on credit at $\$ 375$ each. The saws are added to Hennigan's rental inventory. Payment is due in 30 days.
8 Hennigan accepts advance deposits for to ol Company of $\$ 75$ .
15 Hennigan receives a bill from Farmer's Electric Company for $\$ 150$ . Payment is due in 30 days.
20 Customers are charged $\$ 750$ by Hennigan for tool Company. Payment is due from the customers in 30 days.
31 Hennigan receives $\$ 500$ in payments from the customers that were billed for Company on December 20.
-Refer to the transactions for Hennigan Rentals. Based on the October 15 transaction, Farmer's Electric will record which of the following in its accounting records?

• A) a credit in Accounts Payable for $150.
• B) a credit in Accounts Receivable for $150.
• C) a debit in Accounts Payable for $150.
• D) a debit in Accounts Receivable for $150.

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Definitions:

Price Inelastic

A situation where the demand for a product does not change significantly in response to price changes.

Price Volatile

Characterizes a market or commodity whose price is subject to rapid, unexpected, and often large changes.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Supply Curve

A graph showing the relationship between the quantity of goods supplied by producers and the price of those goods.