X&Y Coreceived $4,000 in Payments from Clients for Services Billed in in a Previous

question 18

Multiple Choice

X&Y Co.received $4,000 in payments from clients for services billed in a previous month.What effect does this transaction have on the accounts under the accrual basis of accounting?

• A) Total assets increase by $4,000.
• B) Assets will increase by $4,000 and revenues will increase $4,000.
• C) Total assets will be decrease by $4,000.
• D) The net effect on assets is zero.

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Definitions:

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Recollections

Memories or thoughts brought back to mind about past experiences or events.

Autobiographical Memory

The aspect of memory that pertains to recollections of personal experiences and events from one's own life.

Automatic Process

Cognitive operations that are fast, require little to no conscious effort, and often occur without our awareness, such as reading familiar words.