Wolfe, Inc. accepted $500 in returned merchandise from a credit customer. How would this affect the financial statements?
A) The balance sheet would be affected - liabilities would increase.
B) The balance sheet would be affected - liabilities would decrease.
C) The income statement would be affected - net income would increase.
D) The income statement would be affected - net income would decrease.
B) The balance sheet would be affected - liabilities would decrease.
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