Yi Company provided services to a customer for $5,500 cash. As a result of this event:
A) total assets increased and total stockholders' equity decreased.
B) total assets were unchanged and cash flows from operating activities increased.
C) liabilities decreased and net income increased.
D) total assets increased and net income increased.

Question

Quizplus · Accepted Answer

The revenue earned from providing services to a customer for $5,500 would increase total assets and net income. The cash received would also increase cash flows from operating activities but would have no impact on total assets. There would be no change in liabilities. Therefore, option D is the best choice.

Yi Company Provided Services to a Customer for $5,500 Cash