Which of the following transactions will increase the balance in a company's checking account?

• A. Recording depreciation expense
• B. Paying monthly rent by electronic transfer
• C. Issuing a check to pay a supplier
• D. Receiving a cash payment from a customer

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the nature of the company's checking account. A checking account is a type of bank account used for day-to-day transactions, and its balance increases when cash is deposited or received.
2. Step 2: Analyze each transaction provided in the problem to determine its impact on the checking account balance. For example, recording depreciation expense is a non-cash transaction and does not affect the checking account balance.
3. Step 3: Evaluate the transaction of paying monthly rent by electronic transfer. This action decreases the checking account balance because cash is being withdrawn to pay the rent.
4. Step 4: Consider the transaction of issuing a check to pay a supplier. Similar to the rent payment, this action also decreases the checking account balance as cash is being used to settle the supplier's invoice.
5. Step 5: Examine the transaction of receiving a cash payment from a customer. This action increases the checking account balance because cash is being deposited into the account, making it the correct answer.