Fitch Supply Services Received $1,000 Cash from a Customer;the Amount

question 8

Multiple Choice

Fitch Supply Services received $1,000 cash from a customer;the amount was owed to the business from the previous month.What is the effect of this transaction on the accounting equation?

• A)Accounts Receivable increases and Service Revenue increases
• B)Cash increases and Accounts Receivable decreases
• C)Cash increases and Service Revenue increases
• D)Cash increases and Accounts Payable decreases

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Definitions:

Short-Term Investments

Investments that are typically held for one year or less, intended for quick gains or temporary cash investment.

Sinking Funds

A type of savings account or fund that is set up to repay debt or an outstanding loan, making periodic payments into the fund for this purpose.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell the products, and collect cash from the sales.

Maturity Value

The total amount payable to an investor at the end of a bond's term, including both the principal and the interest.