question archive If a company provides services to clients but has not yet collected any cash
If a company provides services to clients but has not yet collected any cash
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If a company provides services to clients but has not yet collected any cash. how should that transaction be classified?
a. Claims exchange transaction
b. Asset use transaction
c. Asset source transaction
d. Asset exchange transaction
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Answer:
c. Asset source transaction
This transaction increases assets (accounts receivable) and increases equity (revenue increases retained earnings), and is therefore classified as an asset source transaction
