Advanced Packaging accepted a credit card account receivable in exchange for $25,000 of services provided to a customer. The credit card company charges a 4% service charge. What effect on the accounting equation will recording the transaction in the company’s accounting records have? It will increase assets and shareholders’ equity by $24,000. It will increase assets by $25,000. It will decrease assets and shareholders’ equity by $1,000. It will decrease shareholders’ equity by $25,000.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Advanced Packaging accepted a credit card account receivable in exchange for $25,000 of services provided to a customer. The credit card company charges a 4% service charge. What effect on the accounting equation will recording the transaction in the company’s accounting records have?

It will increase assets and shareholders’ equity by $24,000.

It will increase assets by $25,000.

It will decrease assets and shareholders’ equity by $1,000.

It will decrease shareholders’ equity by $25,000.

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