During the Year, Millstone Company Earned $6,500 of Cash Revenue

Multiple Choice

During the year, Millstone Company earned $6,500 of cash revenue, paid cash dividends of $1,000 to owners and paid $4,000 for cash expenses. Liabilities were unchanged. Which of the following accurately describes the effect of these events on the elements of the company's financial statements?

A) Assets increased by $6,500.
B) Assets increased by $1,500.
C) Equity increased by $2,500.
D) Assets increased by $5,500.