Mulberry Corporation Collected $16,000 from One of Its Customers, the Amount

question 164

Multiple Choice

Mulberry Corporation collected $16,000 from one of its customers, the amount owed from the previous month. How does this affect the accounting equation for Mulberry?

• A) Assets increase by $16,000; liabilities decrease by $16,000.
• B) Assets increase by $16,000; assets decrease by $16,000.
• C) Assets increase by $16,000; liabilities increase by $16,000.
• D) Assets increase by $16,000; equity increases by $16,000.

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Definitions:

UCC

The Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Oral Contract

is an agreement between parties that is spoken and not written down, yet is legally binding, provided it can be proven to exist and meets legal requirements.

Written Memorandum

A document recording the terms of a contract or agreement, not necessarily formalized but intended as a binding outline of intent between parties.

Course of Performance

A term used in contract law referring to the conduct between parties that can help interpret the agreement's terms over time.