Ott Company Sold Services for Cash

question 50

Multiple Choice

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

• A) Assets increase; liabilities, no effect; owner's equity increases.
• B) Assets decrease; liabilities, no effect; owner's equity increases.
• C) Assets increase; liabilities, no effect; owner's equity decreases.
• D) Assets increase; liabilities, increase; owner's equity, no effect.

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Definitions:

Property Rights

The legal rights to use, transfer, or sell property, whether tangible or intangible, recognized and protected by law.

Higher User Costs

Increased charges or expenses borne by users for accessing or utilizing services, goods, or facilities.

Extracted More Quickly

The act of removing or obtaining resources at an accelerated rate from an environment or source.

Renewable Natural Resources

Things such as forests, water in reservoirs, and wildlife that are capable of growing back or building back up (renewing themselves) if they are harvested at moderate rates.