Lang Industries provided services to customers then sent invoices for the amounts owed. What effect does this transaction have on the accounting equation?

Question

Quizplus · Accepted Answer

Providing services increases the amount owed to the company and therefore increases assets (accounts receivable or cash). Sending invoices to customers does not affect liabilities. Revenue earned from providing services increases retained earnings, which is part of equity. Therefore, assets and retained earnings increase.

Lang Industries Provided Services to Customers Then Sent Invoices for the Amounts