For the cash sale, what is the immediate effect on cash balance?

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Multiple Choice

For the cash sale, what is the immediate effect on cash balance?

Explanation:
When a sale is made for cash, cash is received right away, so the cash balance goes up by the amount collected. In accounting terms, you would debit Cash to reflect the asset increase and credit Sales Revenue to record the income. There is also usually a reduction in inventory for the cost of goods sold, but the immediate effect on the cash line is an increase. This contrasts with a sale made on credit, where cash would not increase immediately.

When a sale is made for cash, cash is received right away, so the cash balance goes up by the amount collected. In accounting terms, you would debit Cash to reflect the asset increase and credit Sales Revenue to record the income. There is also usually a reduction in inventory for the cost of goods sold, but the immediate effect on the cash line is an increase. This contrasts with a sale made on credit, where cash would not increase immediately.

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