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If cash is received in advance from a customer a. liabilities will increase and assets will increase. b. assets will increase and liabilities will decrease. c. retained earnings will increase and assets will increase. d. stockholders' equity will decrease and assets will increase. e. assets will decrease and liabilities will decrease.

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TomShelby

Answer:

a. liabilities will increase and assets will increase.

Explanation:

cash debit (+assets)

unearned revenues credit (+liabilities)

Assets will increase as we are receiving cash, which is an asset.

Liabilities will decrease as this are unearned services. They are an obligation from the point of view of the firm as it is now force to deliver the goods, provide the service o return the cash. The revenue is not achieved yet thus; it is a liability.

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