Consider the transactions listed. Match them to the financial statement effects listed
-Receive prepayment from customer
A) Increase assets and increase liabilities
B) Decrease liabilities and decrease assets
C) Decrease assets and decrease equity
D) Decrease assets and increase assets

Question

Quizplus · Accepted Answer

Receiving a prepayment from a customer increases assets (cash or accounts receivable) and also increases liabilities (unearned revenue), as the company has an obligation to deliver goods or services in the future.

Consider the Transactions Listed