Sam's Snow Removal Received $500 at the Beginning of the Winter

question 90

Multiple Choice

Sam's Snow Removal received $500 at the beginning of the winter to cover the fees for the entire winter for cleaning a customer's driveway while they went to Florida for the season.What is the effect of this transaction on the accounting equation?

• A)Assets increases by $500 and owners' equity increases by $500.
• B)Assets increases by $500 and liabilities increases by $500.
• C)Liabilities increases by $500 and owners' equity increases by $500.
• D)The increase and decrease in assets offset each other.