Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 22 - No. 24)
When a company receives cash for services to be performed in the future, how is the accounting equation impacted?
Assets increase and liabilities increase.
Assets increase and owner's equity increases.
Assets decrease and liabilities increase.
Assets decrease and owner's equity decreases.
Explanation
Cash (an asset) increases, and unearned revenue (a liability) increases.
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