Beethoven Company provided consulting services and billed the client $3600. As a result of this event
A) assets remained unchanged.
B) assets increased by $3600.
C) owner's equity increased by $3600.
D) assets and owner's equity both increased by $3600.

Question

Quizplus · Accepted Answer

When a company provides services and bills the client, it is a revenue generating event. Therefore, the accounting equation will be impacted as follows: assets increase (due to accounts receivable), and owner's equity increases (due to revenue earned). In this case, both assets and owner's equity will increase by $3600.

Beethoven Company Provided Consulting Services and Billed the Client $3600