question 3\na novelties company makes cash sales to customers. what effect does this transaction have on the…

question 3\na novelties company makes cash sales to customers. what effect does this transaction have on the accounting equation?\no a. assets and liabilities increase.\no b. assets and retained earnings increase.\no c. liabilities and retained earnings increase.\no d. there is no effect on the accounting equation, as one asset account increases while another asset account decreases.

question 3\na novelties company makes cash sales to customers. what effect does this transaction have on the accounting equation?\no a. assets and liabilities increase.\no b. assets and retained earnings increase.\no c. liabilities and retained earnings increase.\no d. there is no effect on the accounting equation, as one asset account increases while another asset account decreases.

Answer

Brief Explanations:

When a company makes cash sales, cash (an asset) increases. Sales also increase revenues, which ultimately increase retained earnings. Assets increase due to the cash received, and retained earnings increase because of the profit - generating sales.

Answer:

B. Assets and retained earnings increase