Which of the following correctly describes the impact of collecting cash from customers for services to be provided in the future?
A)Assets and stockholders' equity increase.
B)Assets and revenues increase.
C)Assets and liabilities increase.
D)Assets and operating income increase.

Question

Quizplus · Accepted Answer

Collecting cash from customers for services to be provided in the future increases assets (cash) and liabilities (unearned revenue) because the company has an obligation to provide services in the future.

Which of the Following Correctly Describes the Impact of Collecting