Sofa So Good,Inc.signs a contract with a programmer for the development of software that will be developed,delivered and paid for in the next year.The signing of the contract:
A) has no effect on the account equation.
B) increases assets.
C) increases liabilities.
D) decreases stockholder's equity.

Question

Quizplus · Accepted Answer

The signing of the contract is a future commitment and does not affect the accounting equation until the software is developed, delivered, or paid for.