Gena's Cleaning Services performs services for its customers during March. Payments for the March services are received in June. How does the transaction for the collection of cash from customers affect the accounting equation of Gena's Cleaning Services?
A) Liabilities increase and assets increase.
B) Total assets remain the same.
C) Assets increase and revenues increase.
D) Assets increase and equity decreases.

Question

Quizplus · Accepted Answer

The collection of cash from customers increases cash (an asset) and decreases accounts receivable (another asset), resulting in no net change in total assets.

Gena's Cleaning Services Performs Services for Its Customers During March