Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 40 - No. 36)
What effect does a cash sale have on the accounting equation?
Assets increase, liabilities decrease.
Assets increase, owner's equity increases.
Assets decrease, owner's equity decreases.
Assets decrease, liabilities increase.
Explanation
Assets increases as cash is received. Owner's equity will be increased due to the revenue earned.
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