On May 1, a Company Provided Legal Services for a New

Multiple Choice

On May 1, a company provided legal services for a new client. The legal fee was $2500 and the client paid, by check, before leaving the office that day. How does this transaction affect the accounting equation?

A) Add $2500 to Cash and add $2500 to Service Revenue.
B) Add $2500 to Cash and add $2500 to Retained Earnings.
C) Add $2500 to Cash and subtract $2500 from Accounts Receivable.
D) Add $2500 to Cash and subtract $2500 from Accounts Payable.