[The Following Information Applies to the Questions Displayed Below

question 93

Multiple Choice

[The following information applies to the questions displayed below.]
The Yankee Corporation has recently begun to accept credit cards. On July 7, Year 1, Yankee made a credit card sale of $600. The credit card company charges a fee of 3% for handling a credit card transaction.
-Which of the following correctly describes the effect of the collection of cash from the credit card company on the financial statements of Yankee Corporation?

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights and dividend eligibility.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Trading Securities

These are debt or equity securities that are purchased primarily for selling in the near term with the intent of generating short-term profits.