Alberta Company accepts a credit card as payment for $450 of services provided for the customer. The credit card company charges a 4% handling charge for its collection services. Select the answer that shows how the entry to record the sale would affect Alberta's financial statements.### Table| Balance Sheet | Income Statement | Statement of Cash Flows ||---------------|------------------------|-------------------------|| Assets = Liabilities + Equity | Revenue - Expense = Net Income | || A. 432 = NA + 432 | 432 - NA = 432 | 432 OA || B. 432 = NA + 432 | 450 - 18 = 432 | 432 OA || C. 432 = NA + 432 | 450 - 18 = 432 | NA || D. 450 = NA + 450 | 450 - NA = 450 | NA |### Multiple Choice- ○ Option A- ○ Option B- ○ Option C- ○ Option DThe table shows different accounting scenarios to understand how the transaction would affect Alberta's financial statements. The columns represent key sections of financial statements, including the balance sheet equations, income statement details, and cash flow statements. The handling charge reduces the revenue by $18 (4% of $450), and this is reflected in options B and C, which show a revenue of $450 and an expense of $18, resulting in a net income of $432. The correct selection should take into account these deductions.

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Description: Alberta Company accepts a credit card as payment for $450 of services provided for the customer. The credit card company charges a 4% handling charge for its collection services. Select the answer that shows how the entry to record the sale would af

The accounting equation serves as the foundation for double-entry bookkeeping, which assures that…

Business

Accounting

A. B. C. D. Assets 432 432 432 450 Balance Sheet Liabilities + NA NA NA ΝΑ Stockholders' Equity 432 432 432 450 Income Statement Revenue - 432 450 450 450 Expense = Net Income NA 18 18 ΝΑ 432 432 432 450 Statement of Cash Flows 432 OA 432 OA ΝΑ ΝΑ

A. B. C. D. Assets 432 432 432 450 Balance Sheet Liabilities + NA NA NA ΝΑ Stockholders' Equity 432 432 432 450 Income Statement Revenue - 432 450 450 450 Expense = Net Income NA 18 18 ΝΑ 432 432 432 450 Statement of Cash Flows 432 OA 432 OA ΝΑ ΝΑ

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Alberta Company accepts a credit card as payment for $450 of services provided for the customer. The credit card company charges a 4% handling charge for its collection services. Select the answer that shows how the entry to record the sale would affect Alberta's financial statements.

### Table

| Balance Sheet | Income Statement | Statement of Cash Flows |
|---------------|------------------------|-------------------------|
| Assets = Liabilities + Equity | Revenue - Expense = Net Income | |
| A. 432 = NA + 432 | 432 - NA = 432 | 432 OA |
| B. 432 = NA + 432 | 450 - 18 = 432 | 432 OA |
| C. 432 = NA + 432 | 450 - 18 = 432 | NA |
| D. 450 = NA + 450 | 450 - NA = 450 | NA |

### Multiple Choice

- ○ Option A
- ○ Option B
- ○ Option C
- ○ Option D

The table shows different accounting scenarios to understand how the transaction would affect Alberta's financial statements. The columns represent key sections of financial statements, including the balance sheet equations, income statement details, and cash flow statements. The handling charge reduces the revenue by $18 (4% of $450), and this is reflected in options B and C, which show a revenue of $450 and an expense of $18, resulting in a net income of $432. The correct selection should take into account these deductions.

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