If services are rendered on account, then:?

1. liabilities will increase.

  1. stockholders' equity will increase.

  2. liabilities will decrease.

  3. assets will decrease.

if you can answer, can you please explain it to me?

2 Answers

  • you are providing services to a third party on account - so they are paying at a later date.

    Assuming this is a profitable exercise:

    Liabilities will not be affected - unless you are hiring someone to provide the service

    Assets will not be affected - you are not selling an asset

    Equity increases as you have made a profit so 2

  • stockholders' equity will increase.

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