Frank Company earned $15,000 of cash revenue. Which of the following accurately reflects how this event affects the company's accounting equation?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Frank Company earned $15,000 of cash revenue. Which of the following accurately reflects how this event affects the company's accounting equation? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Cash revenue increases the cash balance (an asset) and also increases the owner's equity (a revenue account). Option C correctly reflects this by showing an increase in both the asset and owner's equity columns. Option A is incorrect because it decreases the cash balance instead of increasing it, and option B is incorrect because it only shows an increase in cash and not owner's equity. Option D is incorrect because it shows an increase in expenses instead of revenue.

Frank Company Earned $15,000 of Cash Revenue