Cash received for services rendered will______________?
Correct answer: D. Increase cash and equity
- A. Increase cash and liability
- B. Increase equity and liability
- C. Increase fixed assets and cash
- D. Increase cash and equity
Explanation
When services are already rendered, the receipt is revenue, so cash increases and equity increases through profit. No liability arises unless the cash was received before providing the service.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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