Illusions, Inc. provided $27,000 worth of services for cash. Which of the following best describes the effect on the expanded accounting equation?

Question

Quizplus · Accepted Answer

When Illusions, Inc. provided $27,000 worth of services for cash, it increased their cash balance (an asset) and increased their revenue. This means the effect would be an increase in both total assets and total revenue, making option B the correct answer. Option A and C are incorrect because they suggest an increase in liabilities, which wouldn't be impacted by this transaction. Option D is incorrect because it suggests a decrease in assets, which wouldn't happen when revenue is generated.