This month,a company performed $517,000 of services and incurred total expenses of $438,000.The company was paid in cash for all its services and paid cash for all its expenses.These transactions would cause:
A)revenues to increase by $517,000,expenses to increase by $438,000,and Retained Earnings to decrease by $79,000.
B)Cash to increase by $517,000,expenses to increase by $438,000,and Common Stock to increase by $79,000.
C)revenues to increase by $517,000,expenses to increase by $438,000,and Cash to increase by $79,000.
D)revenues to increase by $79,000,expenses to increase by $438,000,and Cash to increase by $517,000.

Question

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The summary entries to record these transactions would (1)increase the Cash account and increase the company's revenue accounts by $517,000 and (2)increase the company's expense accounts and decrease its Cash account by $438,000.As a result,the Cash account would increase by $79,000 (or increases of $517,000 − decreases of $438,000).Since revenues are greater than expenses,the resulting net income would increase (rather than decrease)Retained Earnings.

This Month,a Company Performed $517,000 of Services and Incurred Total