Contours, Inc. sold merchandise that cost $6,000 to a customer on account for $9,000 under terms 2/10, n/30. Customers returned merchandise that had been sold for $1,000. This merchandise had originally cost Contours $700. The remaining receivables were collected after the discount period had expired. Which of the following shows how recognizing the collection of the receivables will affect a company's financial statements?

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Assets Cash + AR + Inv. 8,000 (8.000) ΝΑ Balance Sheet Cash 7,840 Assets Cash + AR 8.000 (8.000) ΝΑ Balance Sheet Balance Sheet Assets (7.840) Inv. - Liab. + ΝΑ AR + Inv. ΝΑ Liab. + Equity ΝΑ NA Assets Cash + AR + Inv. 8,000 (8,000) ΝΑ Balance Sheet Equity ΝΑ Liab. + Equity ΝΑ ΝΑ Liab. + Equity ΝΑ ΝΑ Income Statement N.Sales - Exp. = Net Inc. 8,000 NÁ 8.000 Income Statement N.Sales - Exp. = Net Inc. ΝΑ NA ΝΑ Income Statement N.Sales - Exp. Net Inc. ΝΑ ΝΑ ΝΑ Income Statement N.Sales - Exp. = Net Inc. ΝΑ NA ΝΑ Cash Flow Statement 8,000 OA Cash Flow Statement NA Cash Flow Statement 7,840 OA Cash Flow Statement 8,000 OA Assets Cash + AR + Inv. 8,000 (8.000) ΝΑ Balance Sheet Cash 7,840 Assets Cash + AR 8.000 (8.000) ΝΑ Balance Sheet Balance Sheet Assets (7.840) Inv. - Liab. + ΝΑ AR + Inv. ΝΑ Liab. + Equity ΝΑ NA Assets Cash + AR + Inv. 8,000 (8,000) ΝΑ Balance Sheet Equity ΝΑ Liab. + Equity ΝΑ ΝΑ Liab. + Equity ΝΑ ΝΑ Income Statement N.Sales - Exp. = Net Inc. 8,000 NÁ 8.000 Income Statement N.Sales - Exp. = Net Inc. ΝΑ NA ΝΑ Income Statement N.Sales - Exp. Net Inc. ΝΑ ΝΑ ΝΑ Income Statement N.Sales - Exp. = Net Inc. ΝΑ NA ΝΑ Cash Flow Statement 8,000 OA Cash Flow Statement NA Cash Flow Statement 7,840 OA Cash Flow Statement 8,000 OA

Answer rating: 100% (QA)

In this question option D is correct Cash incresed by 8000 Ac... View the full answer