A company provided services to customers then sent them invoices for the amounts owed. What effect does this transaction have on the accounting equation?
A)Assets and liabilities increase.
B)Assets and retained earnings increase.
C)Liabilities decrease and contributed capital increases.
D)Assets and liabilities decrease.

Question

Quizplus · Accepted Answer

When a company provides services and invoices customers, it increases assets (accounts receivable) and increases retained earnings (revenue), affecting the accounting equation.

A Company Provided Services to Customers Then Sent Them Invoices