Question

Sheffield Corp. received a cash advance of $530 from a customer. As a result of this event, liabilities decreased by $530. Both assets and equity increased by $530. assets increased by $530. equity increased by $530.

Answer 1

The correct answer is that the assets will be increased through $530

Step-by-step explanation:

The cash in advance is the amount of payment which is used in some of the trade agreements. The cash in advance is needed which the buyer paid to the seller in form of cash before the shipment is received and sometimes, it is made even before the shipment.

So, in this case, the company received the cash which is in advance worth of $530 from the client. So, this will result in increasing the cash for the business as cash is the asset for the business which is earned by business by providing or offering the services or product to client.