Carrie billed her legal clients $5,000 for legal work completed during the month. This transaction will
A) cause a $5,000 increase in revenues and liabilities.
B) cause a $5,000 increase in revenues and a decrease in liabilities.
C) cause a $5,000 increase in assets and revenues.
D) not be recorded until the cash is collected.

Question

Quizplus · Accepted Answer

Billing clients for services rendered increases both assets (accounts receivable) and revenues. The increase in assets reflects the expectation of future cash inflow from clients, while the increase in revenues reflects the earnings from services provided.

Carrie Billed Her Legal Clients $5,000 for Legal Work Completed