A company performed services for a customer for cash. This transaction increased assets and:
A) decreased equity.
B) increased liabilities.
C) increased expenses.
D) increased revenues.

Question

Quizplus · Accepted Answer

When a company performs services for a customer and receives cash in return, it is a revenue-generating transaction. Therefore, it would increase the company's assets through the cash received and increase revenue, increasing the equity in the long run. So, option A is incorrect. It does not involve any liabilities, so option B is wrong. It doesn't increase any expenses, only the cost of the service rendered or profit, so option C is incorrect.  Therefore, the correct answer is D.

A Company Performed Services for a Customer for Cash