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Crane Company provided consulting services and billed the client $3,140
Crane Company provided consulting services and billed the client $3,140. As a result of this event:
A. stockholders' equity increased by $3,140
B. assets and stockholders' equity both increased by $3,140
C. assets remained unchanged
D. assets increased by $3,140
Expert Solution
The correct answer is option (B).
Crane Company provided consulting services and billed the client $3,140. As a result of this event assets and stockholders' equity both increased by $3,140.
Explanation: The asset would be increased by $3,140 due to the increase in the account receivables. The stockholders' equity would increase by $3,140 due to the increase in the revenue which in turn would increase the retained earnings and finally the stockholders equity.
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