Services are provided for customers who are sent bills for the amount they owe.For this transaction,identify the effect on the accounting equation.
A)Assets increase and liabilities increase.
B)Assets increase and stockholders' equity increases.
C)Liabilities increase and stockholders' equity decreases.
D)Liabilities decrease and assets decrease.

Question

Quizplus · Accepted Answer

When services are provided on credit, accounts receivable (an asset) increases, and revenue (which increases stockholders' equity) is recognized.

Services Are Provided for Customers Who Are Sent Bills for the Amount