Citron Inc. pays transportation charges of $200 for delivery of the merchandise sold to Megaton Co. What is the effect of this transaction in the books of Citron and Megaton? a. Retained earnings decrease by $200 in the books of Citron Inc., O and there is no effect in the books of Megaton Co. b. Retained earnings increase by $200 in the books of Citron Inc., O and there is no effect in the books of Megaton Co. c. Retained earnings increase by $200 in the books of Citron Inc., and operating expenses increase by $200 in the books of Megaton Co. d. Retained earnings decrease by $200 in the books of Citron Inc., and operating expenses decrease by $200 in the books of Megaton Co.
Citron Inc. pays transportation charges of $200 for delivery of the merchandise sold to Megaton Co. What is the effect of this transaction in the books of Citron and Megaton? a. Retained earnings decrease by $200 in the books of Citron Inc., O and there is no effect in the books of Megaton Co. b. Retained earnings increase by $200 in the books of Citron Inc., O and there is no effect in the books of Megaton Co. c. Retained earnings increase by $200 in the books of Citron Inc., and operating expenses increase by $200 in the books of Megaton Co. d. Retained earnings decrease by $200 in the books of Citron Inc., and operating expenses decrease by $200 in the books of Megaton Co.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Citron Inc. pays transportation charges of $200 for delivery of the merchandise sold to
Megaton Co. What is the effect of this transaction in the books of Citron and Megaton?
a. Retained earnings decrease by $200 in the books of Citron Inc.,
and there is no effect in the books of Megaton Co.
b. Retained earnings increase by $200 in the books of Citron Inc.,
and there is no effect in the books of Megaton Co.
c. Retained earnings increase by $200 in the books of Citron Inc.,
and operating expenses increase by $200 in the books of Megaton
Co.
d. Retained earnings decrease by $200 in the books of Citron Inc.,
and operating expenses decrease by $200 in the books of Megaton
Co.
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