Your new firm is operating in an all-cash environment without taxes. You sold $1,000 of inventory for three times the amount you paid for it. The accounting entries you would make for this transaction are:

A) $1000 increase in cash, $1,000 decrease in inventory.
B) $2,000 increase in cash.
C) $3,000 increase in cash, $1,000 decrease in inventory, $2,000 increase in accounts receivable.
D) $3,000 increase in cash, $1,000 decrease in inventory, $2,000 increase in retained earnings.

D