BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -stockholders’ equity will increase. Rendering service on account increases the accounts receivable account and income. Increases in income or revenue cause an increase in retained earnings. This increases stockholders equity.

Detailed explanation-2: -Since the normal balance for owner’s equity is a credit balance, revenues must be recorded as a credit. At the end of the accounting year, the credit balances in the revenue accounts will be closed and transferred to the owner’s capital account, thereby increasing owner’s equity.

Detailed explanation-3: -Services rendered on credit Unless a business accepts a payment upfront for their services, they render the service on credit, meaning that the final payment is due once they complete the work.

Detailed explanation-4: -The main accounts that influence owner’s equity include revenues, gains, expenses, and losses. Owner’s equity will increase if you have revenues and gains. Owner’s equity decreases if you have expenses and losses. If your liabilities become greater than your assets, you will have a negative owner’s equity.

Detailed explanation-5: -A credit entry increases liability, revenue or equity accounts-or it decreases an asset or expense account.