multiple choice question\nlmn enterprises performs accounting services for a client for $3,000 cash. what is…

multiple choice question\nlmn enterprises performs accounting services for a client for $3,000 cash. what is the effect on the accounting equation?\n\nincrease assets and increase retained earnings\nincrease one asset and decrease another asset\nincrease liabilities and decrease retained earnings\ndecrease assets and increase liabilities

multiple choice question\nlmn enterprises performs accounting services for a client for $3,000 cash. what is the effect on the accounting equation?\n\nincrease assets and increase retained earnings\nincrease one asset and decrease another asset\nincrease liabilities and decrease retained earnings\ndecrease assets and increase liabilities

Answer

Brief Explanations:

When LMN Enterprises performs accounting services for cash, cash (an asset) increases by $3,000. The revenue from the accounting - services increases retained earnings as it contributes to the company's earnings. The accounting equation is Assets = Liabilities + Equity (and retained earnings is part of equity). So, assets increase due to the cash received and retained earnings increase due to the revenue earned.

Answer:

Increase assets and increase retained earnings