When an entity performs services for cash, how will the accounting equation beaff ected? a. increased equity and increased assetsb. increased equity and decreased assetsc. increased assets and decreased liabilitiesd. no eff ect


  • Réponse publiée par: homersoncanceranguiu
    EFFECT OF ACCOUNTING TRANSACTIONEffects of Business Transactions upon the Accounting Equation

    Accounting defined : read more on:

    A process involves the transferring of journal entries to the ledger accounts to bring together the effect of the transactions to the individual accounts of the company. read more on:

    •Increase in assets= increase in owner’s equity

    •Increase in assets= increase in liabilities

    •Increase in some forms of assets= decrease in other forms of assets

    •Decrease in assets= Decrease in owner’s equity

    •Increase in some forms of Assets= Decrease in other forms of liabilities

    •Increase in liabilities= decrease in capital

    •Decrease in assets= decrease in liabilities

    •Increase in owner’s equity= decrease in liabilities

    •Increase in owner’s equity= decrease in liabilities


    An entity performs services for cash

    The equation should be :


            Service Revenue      

    Letter A

    Increased in equity and increase in assets


    An entity will increase it's cash as considered as an asset and it will increase also it's service revenue as considered equity.

    A business transaction can affect two accounts on the same side of the accounting equation and still leave the equation in balance. read more on:

  • Réponse publiée par: batopusong81

    c. increased assets and increased liabilities


    increase assets because the entity by goods which these good can be owned by the company, and increased in liabilities because they buy these goods through credit.


  • Réponse publiée par: cyrishlayno

    Subject Economics

    The correct answer among the listed choices is letter a. Short-term investments or marketable securities normally falls under the category of current assets since these are expected to be easily convertible to cash within the next 3 months to 12 months.


    In accounting, assets are any resources with value owned by the business, company, entity or person. These are legally owned by the business or entity.  Assets have two categories, these are:

    Current AssetsNon-current Assets1. Current Assets

    -these are assets that can be readily convertible to cash in a normal operating cycle of a business. Normal operating cycle is within 1 year.

    Some Examples of Current AssetsCash and cash equivalentsAccounts ExpensesMarketable Securities/ Short-term Investments2. Non-current Assets

    -these are long-term assets or long-term investments that have a longer useful life that is usually more than 1 year. Not easily convertible to cash.

    Some Examples of Non-Current AssetsLandProperty, Plant and EquipmentTrademarksLong-term InvestmentsGoodwill

    All fixed assets and intangible assets fall under the category of non-current assets.

    Further related topics about assets and liabilities

    What is the opposite of assets

    For related topics about fundamental accounting equation


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When an entity performs services for cash, how will the accounting equation beaff ected? a. increase...