Chaffin Consulting performed consulting services during June on account, and collections for these services were not received until August.
What effect did performing these services have on the accounting equation during June?
A) Increase in assets and decrease in stockholders' equity
B) Increase in assets and increase in stockholders' equity
C) Decrease in assets and decrease in stockholders' equity
D) Decrease in assets and increase in stockholders' equity

Question

Quizplus · Accepted Answer

Performing services on account increases assets (accounts receivable) and increases stockholders' equity (revenue) in June, reflecting the economic benefit earned from providing the service.

Chaffin Consulting Performed Consulting Services During June on Account, and Collections