When a company makes a sale under accrual accounting, what is the impact on the balance sheet?
A)Assets increase
B)Assets decrease
C)Assets and owners' equity both increase
D)The increase and decrease in assets offset each other

Question

Quizplus · Accepted Answer

Under accrual accounting, when a company makes a sale, it recognizes the revenue immediately, which increases owners' equity due to the increase in net income. Additionally, if the sale is made on credit, accounts receivable (an asset) increases, leading to an increase in both assets and owners' equity.

When a Company Makes a Sale Under Accrual Accounting, What