Hamilton Lawn Service Earned $1,000 for Services Rendered and Collected

question 154

Multiple Choice

Hamilton Lawn Service earned $1,000 for services rendered and collected cash from its customer.What is the effect on accounts?

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

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Definitions:

Depreciation

The reduction in the value of an asset over time, typically due to wear and tear, obsolescence, or market conditions.

Net Investment

The total spending on new capital minus depreciation on existing capital within a given period.

Gross Investment

Refers to the total amount of investment in physical assets and capital expenditures made by businesses before accounting for depreciation.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or age.