What would be the effect on the accounts if the business provided services to a customer collecting cash?
A)An asset would be debited and an expense debited.
B)Capital would be credited and Revenue credited.
C)An asset would be debited and Revenue credited.
D)An asset would be debited and Capital credited.

Question

Quizplus · Accepted Answer

When the business provides services to a customer, it will increase its assets (cash) and generate revenue. Therefore, an asset (cash) will be debited and revenue will be credited. Choice A is incorrect because it includes an expense, which is not relevant in this transaction. Choice B is incorrect because it includes a credit to capital, which is not affected by this transaction. Choice D is incorrect because it includes a credit to capital, which is not affected by this transaction.

What Would Be the Effect on the Accounts If the Business