Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 45 - No. 13)
What is the effect of a credit sale on a company's accounting equation?
Assets increase and liabilities increase.
Assets increase and equity increases.
Assets increase, and liabilities decrease.
Assets and liabilities stay the same.
Explanation
A credit sale increases accounts receivable (an asset) and sales revenue (increases equity).
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