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Financial Accounting

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Effect of a Sale Made "On Account" on Financial Statements

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FINACT-VV19G9

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:

A

Assets and liabilities increased.

B

Assets and liabilities decreased.

C

Assets and owner's equity increased.

D

Assets and owner's equity decreased.

E

Liabilities decreased and owner's equity increased.

F

Lucky Tee's financial statement elements were not impacted by this transaction.