Hamilton Lawn Service Earned $1,000 for Services Rendered

question 68

Multiple Choice

Hamilton Lawn Service earned $1,000 for services rendered.The customer promised to pay at a later time.What is the effect on accounts?

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

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Definitions:

Administrative Expenses

Costs related to the general operation of a business, such as salaries of executive personnel and office supplies.

Client-Visits

The number of times clients come to a business location or are contacted for service purposes within a given time frame.

Activity Variance

The difference between the expected amount of activity and the actual activity level, often used in budgeting and forecasting.

Selling and Administrative Expenses

Costs not directly tied to the production of goods or services, including sales, marketing, and administrative functions.