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Billed Clients for Services Provided: Effect on the Accounting Equation (With Example) Correct Answer Of Multiple Choice Question (MCQ) a. Assets and Owner's Equity Go Up. Billed clients for services performed means that you, as a service company, performed the work tasks as requested by clients and send bills to clients demanding them to make payment for services provided against completed work tasks. So, you earned the revenue but the payment is not received from clients. When a business bills clients for services already provided , it has completed the work and earned the revenue. However, the customer has not paid yet . Instead of receiving cash immediately, the business records an Accounts Receivable , which represents money the customer owes. At the same time, because the service has already been performed, the business recognizes Service Revenue . Revenue increases the owner's equity because it contributes to the company's profits. Therefore, the accounting equatio...

Received Commission: Effect on Accounting Equation (MCQ Explanation) Understanding how commission transactions affect the accounting equation is essential for accounting students. When a business earns commission, it affects both assets and owner's equity. This guide explains the correct MCQ answer, journal entry, and accounting equation impact with examples. Question: Received commission. Show its effect on the accounting equation. a. Assets and owner's equity goes down b. Assets and liabilities goes up c. Assets goes down and owner's equity goes up d. Assets and owner's equity goes up Correct Answer: d) Assets and owner's equity goes up Explanation: Effect of Received Commission on Accounting Equation When a business receives commission , it means the business has earned income by providing services to a customer. In accounting, earned commission is treated as revenue because it increases the profit of the business. A commission received transaction affe...