What are the effects on the financial condition of the business from the adjustment for revenues earned,but not yet collected,during the accounting period?

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Companies that provide accounting,legal,or promotional services that span more than one month are unlikely to receive cash or bill customers until the services have been provided in full.The revenue recognition principle indicates they should be recorded during the period earned.Thus,an accrual adjustment is needed to increase Accounts Receivable on the balance sheet and increase the related revenue account on the income statement.An increase in a revenue account increases net income and,as a result,it also increases total stockholders' equity.

What Are the Effects on the Financial Condition of the Business