Reference no: EM132904587

Problem 1: John's General Store accepts for purchase, cash and personal check, VISA, and MasterCard credit cards only. James had just purchased a Laser Tag game for his grandson Jack, paying $59.00 using his VISA card. James walks out of the store carrying the Laser Tag game, anticipating a fun afternoon with the grandson. John's General Store uses the accrual basis for accounting for financial reporting purposes. Considering just the above transaction, how will John's financial statements be impacted?

A. John will recognize a $59.00 increase in his Accounts Receivable on the Balance Sheet, and a $59.00 increase in Deferred Revenues on the Balance Sheet

B. John will recognize a $59.00 increase in his Accounts Receivable on the Balance Sheet, and a $59.00 increase in Deferred Revenues on the Income Statement.

C. John will recognize a $59.00 increase in his Accounts Receivable on the Balance Sheet, and a $59.00 increase in store Revenues on the Income Statement.

D. John will recognize a $59.00 increase in his Cash balance on the Balance Sheet, and a $59.00 increase in store Revenues on the Income Statement.

E. John will recognize a $59.00 increase in his Cash account on the Balance Sheet, and a $59.00 increase in Deferred Revenues on the Balance Sheet

F. John will recognize a $59.00 increase in his Cash account on the Balance Sheet, and a $59.00 increase in Cost of Goods Sold on the Income Statement