Match Each Transaction with Its Effect on the Accounting Equation

question 170

Multiple Choice

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Received payment from a customer on account

• A)Increase assets, increase liabilities
• B)Increase liabilities, decrease owner's equity
• C)Increase assets, increase owner's equity
• D)No effect
• E)Decrease assets, decrease liabilities
• F)Decrease assets, decrease owner's equity

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Definitions:

Explicit Costs

Direct, out-of-pocket payments for inputs or resources used by a business, easily identifiable and recorded.

Entrepreneurial Talent

The unique set of skills, insight, and intuition possessed by individuals that enables them to identify and exploit new business opportunities.

Forgone Interest

The potential interest income lost when capital is invested in one project instead of being deposited in a savings account or invested in an alternative project.

Total Revenues

The complete amount of income generated by a business from its sales or services before any expenses are subtracted.