Question

Cool Taste Company recorded $5,000 in sales on account for the week. What effect does this transaction have on the accounting equation?

Answer 1

increase in assets is = 5000

and increase in stockholders' equity = $5000

Step-by-step explanation:

given data

sales = $5000

solution

we know best represents the accounting equation is as

Assets = Liabilities + Stockholder Equity ....................1

assets are the resource own by the business

and here corporation refers to the total owner equity as stockholder equity

and Liabilities is right of creditor

so by sale of $5000

increase in assets is = 5000

and increase in stockholders' equity = $5000