Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 24 - No. 8)
What is the effect of a cash sale on the accounting equation?
Assets decrease, Equity increases.
Assets increase, Equity decreases.
Assets increase, Equity increases.
Liabilities increase, Equity decreases.
Explanation
Cash sales increase cash (an asset) and increase sales revenue (an element of equity).
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