On May 1,a company provided legal services for a new client.The legal fee was $2,000 and the client paid,by check,before leaving the office that day.How does this transaction affect the accounting equation?
A) Add $2,000 to Cash and subtract $2,000 from Service Revenue.
B) Add $2,000 to Cash and add $2,000 to Retained Earnings.
C) Add $2,000 to Cash and subtract $2,000 from Accounts Receivable.
D) Add $2,000 to Cash and subtract $2,000 from Accounts Payable.
Correct Answer:
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