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Transaction Summary

The following is a chapter study question I do not understand.
What is the correct answer and why.

The following entry appears in Tri-County's general journal on March 10, 2005:

DEBIT CREDIT
Accounts Receivable.............. 25,000
Cash.................................... 11,000
Equipment ............................................. 36,000

This transaction involves:
a. Tri-County's collection of $25,000 on an account receivable.
b. Payment of $11,000 cash by Tri-County.
c. An $11,000 overall increase in Tri-County assets.
d. Sale of equipment by Tri-County for $36,000

Solution Preview

The correct answer is d.

Accounts receivable is debited whenever a sale transaction takes place. In this particular case, accounts receivable is debited for $25,000 and cash for 11,000. This implies a sale transaction, where 11,000 has been received in cash and 25,000 ...

Solution Summary

The solution provides an explanation for the transaction summary

$2.19