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

question 122

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; Martin, Capital decreases.
• B)Cash account increases; Accounts receivable decreases.
• C)Accounts Payable increases; Martin, Capital decreases.
• D)Cash increases; Accounts Payable decreases.

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Definitions:

Dividends Paid

The total amount of earnings distributed by a company to its shareholders as a reward for their investment.

Inventory Increase

This occurs when there is a rise in the quantity or value of goods held by a company, signaling a buildup of stock.

Amortization of Patents

The systematic reduction of the financial value of a patent over its useful life, reflecting its consumption and obsolescence.

Gain on Sale

An increase in funds resulting from selling an asset for more than its carrying amount on the balance sheet.