A cash sale typically results in increases to which two accounts?

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Multiple Choice

A cash sale typically results in increases to which two accounts?

Explanation:
When you make a cash sale, you receive cash right away, so your asset increases. At the same time, you’ve earned revenue, which increases net income and, through retained earnings, increases owners’ equity. Liabilities aren’t affected by a straightforward cash sale. In double-entry terms, you would debit Cash and credit Sales Revenue. Inventory (an asset) may decrease and cost of goods sold would be affected, but those changes don’t change the fact that cash and revenue are the two accounts that rise in this transaction.

When you make a cash sale, you receive cash right away, so your asset increases. At the same time, you’ve earned revenue, which increases net income and, through retained earnings, increases owners’ equity. Liabilities aren’t affected by a straightforward cash sale. In double-entry terms, you would debit Cash and credit Sales Revenue. Inventory (an asset) may decrease and cost of goods sold would be affected, but those changes don’t change the fact that cash and revenue are the two accounts that rise in this transaction.

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