Faith West has a consulting business. She received $10,000 in cash from a client for services rendered. The effect of this transaction on the accounting equation is a(n) __________.

Question

decrease in assets and owner's equity

increase in one asset and a decrease in another asset

increase in assets and owner's equity

decrease in one asset and an increase in another asset

Answer 1

The transaction where Faith West received $10,000 in cash from a client for services rendered results in an increase in assets (cash) and also an increase in owner's equity (revenue). Therefore, the correct answer is:

increase in assets and owner's equity.