Myers Landscaping Corporation performs lawn mowing services for its customers.Payments for the current month's services are expected to be received next month.How does this transaction affect the accounting equation of Myers Landscaping?

Question

Quizplus · Accepted Answer

When services are performed, revenue is recognized, which increases equity. Since payment is expected next month, accounts receivable (an asset) increases, thus increasing both assets and equity.

Myers Landscaping Corporation Performs Lawn Mowing Services for Its Customers