A company provides services on account.Indicate how this transaction would affect the following five financial statement items:
$\begin{array}{llllll}
&&& \text { Stockholders' } \
&\text { Assets } &\text { Liabilities } &\underline{\text { Equity }}& \underline{\text { Revenues }} &\underline{\text { Expenses }}\
\text { a. } & \text { Increase } & \text { Decrease } & \text { Increase } & \text { Decrease } & \text { No effect } \
\text { b. } & \text { Increase } & \text { No effect } & \text { Increase } & \text { Increase } & \text { Decrease } \
\text { c. } & \text { Increase } & \text { No effect } & \text { Increase } & \text { Increase } & \text { No effect } \
\text { d. } & \text { No effect } & \text { No effect } & \text { No effect } & \text { No effect } & \text { No effect }\
\end{array}$

Question

Quizplus · Accepted Answer

When a company provides services on account, assets (accounts receivable) increase, revenues increase, and stockholders' equity increases due to the increase in retained earnings from the revenue. Liabilities and expenses are not affected.

A Company Provides Services on Account A)Option a B)Option B C)Option C D)Option D

A Company Provides Services on Account A)Option a
B)Option B
C)Option C
D)Option D