Indicate Whether Each of the Following Statements Is True or False

question 1

Short Answer

Indicate whether each of the following statements is true or false.
_____ a)A benefit of making credit card sales is that there is no cost to the merchant.
_____ b)A benefit of accepting credit cards is that increased sales may be generated.
_____ c)Recording a credit card sale increases total assets and increases total liabilities.
_____ d)Recording the collection of cash from the credit card company increases cash and increases revenue.
_____ e)The income statement is not affected at the time the cash receipt is recorded.

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal amount.

Allowance Method

An accounting technique used to account for accounts receivable that a company does not expect to collect fully, thereby creating an allowance for doubtful accounts.

Perpetual Inventory System

An inventory accounting method that instantly records inventory sales or purchases using computerized point-of-sale systems and enterprise asset management software.

Accounts Receivable

This refers to the money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.