Jane Is an Accountant Operating as a Sole Proprietor

Multiple Choice

Jane is an accountant operating as a sole proprietor. On 1 February she does some work for a client on credit who she invoices for $120. Which of the following represents the effect of this transaction on the accounting equation?

A) Increase in cash at bank $120; decrease in liability accounts payable $120.
B) Increase in equity $120; increase in liability accounts payable $120.
C) Increase in asset accounts receivable $120; increase in equity $120.
D) Increase in cash at bank $120; increase in equity $120.