Question

Which of the following statements is correct?

• A. Recording revenue results in an increase in assets or a decrease in liabilities.
• B. Recording revenue results in an increase in assets or a decrease in stockholders’ equity.
• C. Recording expenses results in a decrease in assets or a decrease in liabilities.
• D. Recording expenses results in an increase in assets or an increase in liabilities.

Answer 1

The correct option is A

Recording revenue results in an increase in assets or a decrease in liabilities.

Answer a. Recording revenue results in an increase in assets or a decrease in liabilities

Explanation: In accounting, the right way to record in the books is revenues earned to increase the assets or decrease the liabilities.