1. A company will earn more profit from a cash sale than from a sale where the customer uses a credit card issued by a third party company.

a. True

b. False

2. Zane Enterprises accepts a credit card as payment for $500 of services provided to a customer. The credit card company charges a 4% handling charge for its collection services. Based on this information

a. Zane will collect $500 cash from the credit card company.

b. Zane will pay the credit card company $500 cash.

c. Zane will collect $480 cash from the credit card company.

d. Zane will pay the credit card company $480 cash.

3. Barron Company accepts a credit card as payment for $1,200 of services provided to a customer. The credit card company charges a 5% handling fee for its collection services. Select the answer that shows how the entry to recognize the event would affect Barrons financial statements.

a. Assets will increase by $1,140.

b. Revenue will increase by $1,200.

c. Expenses will increase by $60.

d. All of the answers describe effects that will occur as a result of recognizing this event.