Hypnosis Institute Received Payments from Customers Who Had Been Billed

question 111

Multiple Choice

Hypnosis Institute received payments from customers who had been billed earlier for services provided.What effect does this transaction have on the accounting equation?

• A) Assets and liabilities increase.
• B) Assets and shareholders' equity increase.
• C) Assets and liabilities decrease.
• D) There is no effect on the accounting equation.

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Definitions:

Mortgage Interest

The interest charged on a loan used to purchase a home, which can often be deducted from one's taxable income.

Property Taxes

Taxes paid by property owners, based on the assessed value of their real estate, used primarily to fund public services like education and infrastructure.

Depreciation

The process of allocating the cost of tangible assets over their useful lives for accounting and tax purposes, reflecting the asset's consumption, wear and tear.

Maintenance

The act of keeping property or equipment in good repair and working condition through regular upkeep and repairs.