Martin Supply Service Received $1,000 Cash from a Customer Which

question 31

Multiple Choice

Martin Supply Service received $1,000 cash from a customer which was owed to the business from the previous month.What is the effect of the cash receipt on the accounts of the business?

• A) Accounts receivable decreases; Owner's capital account decreases.
• B) Cash account increases; Accounts receivable decreases.
• C) Accounts payable increases; Owner's capital account decreases.
• D) Cash increases; Accounts payable decreases.

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Definitions:

Base Year

A specific year against which economic or financial data is compared to measure economic performance or inflation.

Ratio

A quantitative relationship between two numbers, showing how many times one value contains or is contained in the other.

Equivalent Ratio

A proportion showing the equality between two ratios or fractions.

Equivalent Ratio

A ratio that has the same value when compared to another ratio, essentially representing the same proportional relationship.