If Services Are Rendered for Cash, Then

question 40

Multiple Choice

If services are rendered for cash, then

• A)assets will increase.
• B)liabilities will increase.
• C)stockholders' equity will decrease.
• D)liabilities will decrease.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Direct Approach

A method of presenting the cash flow from operating activities by showing major classes of gross cash receipts and payments.

Variable Interest Entity (VIE)

A legal entity in which an investor holds a controlling interest that is not based on the majority of voting rights.

Intra-Entity Bonds

Bonds issued between different divisions or units within the same company, rather than to external investors.