What happens to the financial statements when a company makes sales of $1,000, of which $200 is sold in cash and $800 is sold on credit? The cash balance will increase by $200; the accounts payable will increase by $800; the retained earnings will decrease by $1,000. The cash balance will increase by $1,000; the accounts receivable will increase by $800; the retained earnings will increase by $200. The cash balance will increase by $1,000; the accounts payable will increase by $800; the retained earnings will decrease by $200. The cash balance will increase by $200; the accounts receivable will increase by $800; the retained earnings will increase by $1,000