Earning revenue
A) increases assets, increases stockholders' equity
B) increases assets, decreases stockholders' equity
C) increases one asset, decreases another asset
D) decreases assets, increases liabilities

Question

Quizplus · Accepted Answer

Earning revenue increases assets through an increase in cash or accounts receivable. When revenue is earned, it also results in an increase in stockholders' equity through an increase in retained earnings. Therefore, the correct choice is A.

Earning Revenue