Which of the following statements is correct?
A)Recording revenue results in an increase in assets or a decrease in liabilities.
B)Recording revenue results in an increase in assets or a decrease in stockholders' equity.
C)Recording expenses results in a decrease in assets or a decrease in liabilities.
D)Recording expenses results in an increase in assets or an increase in liabilities.

Question

Quizplus · Accepted Answer

Recording revenue means that the business has earned income, which will increase the company's assets such as cash, accounts receivable, or inventory. Alternatively, companies can use revenue to reduce liabilities such as unearned revenue or accounts payable.

Which of the Following Statements Is Correct