Question

Question 1 A firm sold goods for $50,000. $10,000 was paid in cash, and the remaining $40,000 was assigned to a customer’s credit account. The goods originally cost $30,000. What are the net changes to the accounts impacted by this transaction?

Answer 1

Answer:

Net changes to the accounts:

1. Service Revenue increases by $50,000.

2. The Cash account will increase by $10,000.

3. The Accounts Receivable will increase by $40,000

4. Inventory will reduce by $30,000

Explanation:

Firm A's net changes and the accounts impacted by these transactions are an increase or a reduction of resources.  The overall net change of business transactions is the net income or loss generated from the venture.