Question

​Diamond, Inc. had the following transactions during​ June: Performed services for​ $2,000 on​ account; received cash on​ account, $8,000; paid​ $700 for repair​ expense; paid​ $1,800 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June​ transactions?

Answer 1

Answer: $5,500 (Increase)

Explanation:

Given that,

Performed services =​ $2,000 on​ account

Received cash on​ account = $8,000

Paid​ for repair​ expense = $700

Payment to a supplier that it owed from the previous month = $1,800

Cash paid = Paid​ for repair​ expense + Payment to a supplier

                 = $700 + $1,800

                 = $2,500

Effect = Received cash -  Paid cash

          = $8,000 - $2,500

          = $5,500 (Increase)