A transaction has been recorded in the general journal of Deluty Company as follows:

Which of the following describes the effect of this transaction on the company's financial statements?
A)Increases Stockholders' Equity
B)Increases Liabilities
C)Decreases Assets
D)Increases Assets

Question

A transaction has been recorded in the general journal of Deluty Company as follows:

Which of the following describes the effect of this transaction on the company's financial statements?
A)Increases Stockholders' Equity 
B)Increases Liabilities 
C)Decreases Assets 
D)Increases Assets

Quizplus · Accepted Answer

The debit to unearned revenue decreases that liability account and the credit to consulting revenue increases that revenue account,which increases stockholders' equity (retained earnings).

A Transaction Has Been Recorded in the General Journal of Deluty