Customers paid $8,000 on their accounts.Which accounts are affected by this transaction?
A)Revenue and Retained Earnings increase $8,000.
B)Cash and Revenue increase $8,000.Liabilities and Expense increase $8,000.
C)Cash increases $8,000 and Accounts Receivable decreases $8,000.Revenue and Retained Earnings are unchanged.
D)Revenue and Retained Earnings decrease $8,000.

Question

Quizplus · Accepted Answer

The payment of $8,000 on the customer's account will increase the company's cash balance by $8,000. At the same time, the accounts receivable balance will decrease by $8,000 since the customer has paid their debt. There is no impact on revenue and retained earnings since this transaction only involves the payment of an existing debt.

Customers Paid $8,000 on Their Accounts