During March,the Long Life Consulting Company provides $23,000 in consulting services for a customer.The customer paid $12,000; the other $11,000 was on account.Which of the following statements about these transactions is correct?
A) Cash increases by $12,000, Consulting Revenue increases by $11,000, and Accounts Receivable increases by $23,000.
B) Cash increases by $12,000, Accounts Receivable increases by $11,000, and Consulting Revenue increase by $23,000.
C) Accounts Receivable increases by $11,000, Liabilities decrease by $12,000, and Stockholders' Equity increases by $1,000.
D) Revenues increase by $12,000, liabilities decrease by $12,000, and stockholders' equity is unchanged.

Question

Quizplus · Accepted Answer

The company provided $23,000 in consulting services, so Consulting Revenue should increase by $23,000. The customer paid $12,000, so Cash increases by $12,000. The remaining $11,000 is on account, so Accounts Receivable increases by $11,000. Therefore, the correct statement is: Cash increases by $12,000, Accounts Receivable increases by $11,000, and Consulting Revenue increases by $23,000. Option B is the only answer that reflects this.

During March,the Long Life Consulting Company Provides $23,000 in Consulting