The credit card sale on Tuesday increases which accounts?

The credit card sale on Tuesday increases which accounts?

• A. Cash and Revenue
• B. Accounts Receivable and Revenue
• C. Cash and Liabilities
• D. Inventory and Revenue

Answer: (B)

Credit card sales are recorded by recognizing revenue at the point of sale and creating a receivable from the card issuer for that amount. Since the business has earned the revenue but hasn’t yet received cash from the card processor, the Accounts Receivable balance increases. Cash would rise only when the card processor deposits funds, which may happen later. Inventory would be affected only if goods were sold (it would typically decrease with cost of goods sold), and liabilities aren’t inherently affected by this sale. Therefore, the sale increases Revenue and Accounts Receivable.

Credit card sales are recorded by recognizing revenue at the point of sale and creating a receivable from the card issuer for that amount. Since the business has earned the revenue but hasn’t yet received cash from the card processor, the Accounts Receivable balance increases. Cash would rise only when the card processor deposits funds, which may happen later. Inventory would be affected only if goods were sold (it would typically decrease with cost of goods sold), and liabilities aren’t inherently affected by this sale. Therefore, the sale increases Revenue and Accounts Receivable.