A Company Performs Services for a Client on Account

question 115

Multiple Choice

A company performs services for a client on account.When the company receives the cash from the customer one month later:

• A)a revenue account is increased.
• B)a liability account is decreased.
• C)there is no change in total assets.
• D)an expense account is decreased.

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Definitions:

Income Effect

How an individual's or economic income shift influences the demand for goods or services.

Substitution Effect

The substitution effect describes the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Higher Wage

The increased remuneration or salary received by an employee, often as a result of promotions, market adjustments, or successful salary negotiations.

Labor for Leisure

The trade-off between working hours for income and spending time on relaxation or enjoyment activities.