Which of the following statements is correct?
A) Recording revenues results in an increase in assets or a decrease in liabilities.
B) Recording revenues results in an increase in assets or a decrease in stockholders' equity.
C)Recording expenses results in a decrease in assets or a decrease in liabilities.
D)Recording expenses results in an increase in assets or an increase in liabilities.

Question

Quizplus · Accepted Answer

Recording revenues results in an increase in assets because it either increases cash (if the revenue is collected in cash) or accounts receivable (if the revenue is earned on credit), both of which are assets. It does not result in a decrease in liabilities.

Which of the Following Statements Is Correct