Multiple Choice
Your company received payment last month for a service that you provided this month.How will the business activity of the current month affect the basic accounting equation?
A) Assets will not change; liabilities (Deferred Revenue) will decrease; and Shareholders' equity (Service Revenue) will increase.
B) Assets (Cash) will increase,liabilities (Deferred Revenue) will increase,and Shareholders' equity will not change.
C) Assets (Cash) will increase,liabilities will not change,and Shareholders' equity (Service Revenue) will increase.
D) Assets (Prepaid Expenses) will decrease,liabilities will not change,and Shareholders' equity (Service Revenue) will increase.
Correct Answer:
Verified
Correct Answer:
Verified
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