A firm received a payment in advance on a customer's special order.What is the effect of this transaction?
A)Increases assets,increases revenues
B)Increases assets,increases liabilities
C)Decreases assets,increases expenses
D)Decreases assets,decreases liabilities

Question

Quizplus · Accepted Answer

Receiving a payment in advance increases assets (cash or cash equivalents) and also increases liabilities (unearned revenue or deferred income) because the service or product has not yet been delivered.

A Firm Received a Payment in Advance on a Customer's