Which Of The Following Statements About Revenues Is Correct?
The correction option of this multiple choice question MCQ is (B), as Revenues are positive for the business means there is cash inflows for the business when goods or services sold for cash or when sales on account is made and the business earned the revenue by providing goods or delivered services to customers / clients. Due to increase in sales, the net income or net profit increases which ultimately increase the Equity Account . Equity is recorded on the right side of the Accounting Equation so sales is also added to equity on the right side of the accounting equation. Increase in revenue is recorded on the right side or credit side of a revenue t-account. Increase in revenue account is credited and other account (Cash or Accounts Receivable) is debited according to the Rules of Debit And Credit . For example, if a sole proprietor earned revenue of $1,000 for cash, then revenue account for the business increases and as a result the equity account also increased by $1,000 as ...