Mize Company provided $45,500 of services on account,and collected $38,000 from customers during the year.The company also incurred $37,000 of expenses on account,and paid $32,400 against its payables.How do these events impact the elements of the financial statements model?
A)Total assets would increase.
B)Total liabilities would increase.
C)Total equity would increase.
D)All of these answer choices are correct.

Question

Quizplus · Accepted Answer

Change in total assets = Increase in accounts receivable because of services provided on account of $45,500 - Decrease in account receivable because of collections on account of $32,400 = $13,100 increase
Change in total liabilities = Increase in accounts payable because of expenses incurred on account $37,000 - Decrease in accounts payable because of payments on account of $32,400 = $4,600 increase
Change in equity = Increase in retained earnings (revenue)of $45,500 - Decrease in retained earnings (expenses)of $37,000 = $8,500 increase

Mize Company Provided $45,500 of Services on Account,and Collected $38,000