Describe how the received cash for services performed affects the three elements of the accounting equation

Accounting Dec 16, 2020

Describe how the received cash for services performed affects the three elements of the accounting equation.

Expert Solution

Cash received for services perform will increase the asset and equity while leave the liability unaffected. The proforma journal entry for this transaction is as follows:

Account	Debit	Credit
Cash	XXX
Service Revenue		XXX

Cash is an asset and a debit to it is an increase. A credit on service revenue will increase equity after recording of the closing entries.

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