Nicklaus Company Sold Inventory Costing $1,000 for $1,400 on Account

Multiple Choice

Nicklaus Company sold inventory costing $1,000 for $1,400 on account.If Nicklaus Company operates under the accrual basis, what effect will the transaction have on the liabilities and owners' equity side of the balance sheet?

A) There will be no effect since the customer to whom the inventory was sold has not yet paid.
B) There will be no effect since the sales and/or cost of goods sold are income statement accounts.
C) Owners' equity will decrease by $1,000.
D) Owners' equity will increase by $400.