bill is received for services rendered this month. It will be paid next month. How does receiving this bill affect the accounting equation?
A) Assets decrease; owner's equity decreases.
B) Liabilities increase; owner's equity decreases.
C) Assets increase; liabilities increase.
D) Liabilities increase; owner's equity increases.

Question

Quizplus · Accepted Answer

Receiving a bill for services rendered increases liabilities (as you now owe more) and decreases owner's equity because expenses reduce the net income, which is a component of owner's equity.

Bill Is Received for Services Rendered This Month