Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 1 - No. 48)
What is the effect on the accounting equation when a business provides services and bills the customer?
Assets decrease, liabilities increase
Assets increase, owner's equity increases
Assets increase, owner's equity decreases
Assets decrease, owner's equity remains the same
Explanation
Assets (Accounts Receivable) increase and Owner's Equity (Revenue) increases.
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