A Business Renders Services to a Client and Issues a Sales

question 109

Multiple Choice

A business renders services to a client and issues a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be true at the time the invoice is issued?

• A)Owner's equity will decrease.
• B)Total liabilities will increase.
• C)Total assets will decrease.
• D)Net income will increase.

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Definitions:

Income Effect

Refers to the change in an individual's or economy's purchase of goods and services resulting from changes in income levels.

Substitution Effect

The change in consumption patterns due to a change in relative prices, holding the consumer's level of utility constant.

Price

The fiscal amount needed for the acquisition of a product or service.

Delphiniums

A genus of flowering plants known for their tall spikes of colorful flowers, commonly found in gardens.