Explain how the following general journal entry affects the accounting equation.
Accounts receivable 500 Service revenue 500
A) Liabilities increase and equity decreases.
B) Assets increase and equity decreases.
C) Both liabilities and assets increase.
D) Both assets and equity increase.

If there is a journal entry that involves account receivable in the debit side and service revenue credit side so both the accounts are increased. As the assets have a normal debit balance so it increased also the service revenue has normal credit balance so it also increased the revenue due to this, the stockholder equity also rises

hence, the correct option is D.

Explain how the following general journal entry affects the accounting equation. Accounts receivable 500 Service revenue 500 A) Liabilities increase and equity decreases. B) Assets increase and equity decreases. C) Both liabilities and assets increase. D) Both assets and equity increase.

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Explain how the following general journal entry affects the accounting equation.
Accounts receivable 500 Service revenue 500
A) Liabilities increase and equity decreases.
B) Assets increase and equity decreases.
C) Both liabilities and assets increase.
D) Both assets and equity increase.