On August 1, Genuine Services Accepted a $6,000 Advance Payment

On August 1, Genuine Services accepted a $6,000 advance payment from a customer for services to be provided in the future. The contract requires the company to review operations at each of the customer's six locations over the next 6 months. What is the impact on the accounting equation of recording this transaction on August 1st?

A) assets and liabilities increase
B) assets and liabilities decrease
C) liabilities decrease and stockholders' equity increases
D) liabilities increase and stockholders' equity decreases

Correct Answer:

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