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Earning revenue journal entry is recorded as:
A: Increases assets, decreases stockholders’ liabilities
B: Decreases assets, increases liabilities
C: Increases assets, increases stockholders’ equity
D: Increases one asset, decrease another asset
Solution
Answer:
C: Increases assets, increases stockholders’ equity is correct.Journal Entry for earning
revenueNatureEffectDateAccountsDebit $Credit $Debtors/CashAmountAssetsIncrease(as it has
been debited)Sales/RevenueAmountStockholders’ equityIncrease(as it has been credited)

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