A transaction caused an increase in both assets and owners' equity.This transaction could have been resulted from the:
A)Sale of services to a customer.
B)Sale of land for a price less than its cost.
C)Borrowing money from a bank.
D)Sale of land for cash at a price equal to its cost.

Question

Quizplus · Accepted Answer

When a company sells services to a customer, it typically receives cash or accounts receivable in exchange for those services. This results in an increase in assets (cash or accounts receivable) and owners' equity (revenues earned from the sale of services). Choices B, C, and D do not necessarily result in an increase in both assets and owners' equity.

A Transaction Caused an Increase in Both Assets and Owners