Mize Company provided $45,500 of services on account,and collected $38,000 from customers during the year.The company also incurred $37,000 of expenses on account,and paid $32,400 against its payables.As a result of these events,
A)total assets would increase
B)total liabilities would increase
C)total equity would increase
D)all of these answer choices are correct

Question

Quizplus · Accepted Answer

The company provided services on account, which means that the company has earned revenue but has not yet collected the cash. This will increase the company's total assets. The company also incurred expenses on account, which means that the company has incurred expenses but has not yet paid the cash. This will increase the company's total liabilities. The company also collected cash from customers and paid cash to creditors. This will increase the company's total equity.

Mize Company Provided $45,500 of Services on Account,and Collected $38,000