Receiving Cash from a Customer for Payment on Account for a Sale

question 145

Multiple Choice

Receiving cash from a customer for payment on account for a sale that was recorded previously will:

• A)have no effect on total assets.
• B)increase total assets.
• C)decrease total liabilities.
• D)increase stockholder's equity.

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Definitions:

Face Value

The nominal value stated on a financial instrument, such as a bond or stock, representing its worth at issuance.

Serial Bonds

Bonds that are issued at the same time but mature at different intervals, allowing for the gradual repayment of the debt.

Maturity Dates

The specified dates on which the principal amount of a debt instrument, such as a bond or loan, is to be repaid to the lender.

Interest-bearing Notes

A debt instrument that pays interest to the lender, including a specified interest rate and maturity date.