Effect of a Sale Made "On Account" on Financial Statements
On July 3, a customer of Lucky Tee, a custom apparel manufacturer, purchased $180 worth of merchandise "on account" from the apparel store. This transaction affected Lucky Tee's financial statement elements as follows:
Assets and liabilities increased.
Assets and liabilities decreased.
Assets and owner's equity increased.
Assets and owner's equity decreased.
Liabilities decreased and owner's equity increased.
Lucky Tee's financial statement elements were not impacted by this transaction.