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7 July, 17:58

G Elliston Company accepted credit card payments for $10,000 of services provided to customers. The credit card company charges a 3% fee for handling the transaction. Which of the following describes the effect of this transaction:

A. increase revenue by $9,700.

B. increase assets by $10,000.

C. increase Retained Earnings by $9, 700.

D. increase net income by $10,000.

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  1. 7 July, 19:10
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    C. increase Retained Earnings by $9, 700.

    Explanation:

    Since it is given that the service provided to customers for $10,000 and it is also not reflected the company income so it would be considered after deducting the 4% free from the total amount i. e

    = $10,000 - $10,000 * 3%

    = $10,000 - $300

    = $9,700

    Hence, the retained earning is increased by $9,700

    Therefore, All other options are wrong
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