Which accounts are affected when the company provides services to a cash customer?
A)Assets and Capital
B)Liabilities and revenue
C)Assets and Revenue
D)None of the above is correct.

Question

Quizplus · Accepted Answer

When a company provides services to a cash customer, the company receives cash and increases its cash account, which is an asset. The company also earns revenue for providing the service, which is recorded in the revenue account. Therefore, the accounts affected are assets (cash) and revenue. Neither liabilities nor capital are affected in this transaction.

Which Accounts Are Affected When the Company Provides Services to a Cash