Services are provided for customers who pay for their services immediately. What effect does this transaction have on the accounting equation? a Assets and liabilities increase. b Assets and liabilities decrease. c Assets and retained earnings increase. d Liabilities increase and retained earnings decreases.

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is