Problem: A company sells a product to a customer on account Which parts) of the accounting equation does this particular transaction change?
Both assets and liabilities
Liabilities only
Assets only
Both assets and owners' equity
I know the answer is Both assets and owners' equity, but I'm confused.
Is revenue under owners' equity or assets? if not, why do both of them go up? is it A/R or cash?
Also wouldn't assets go down due to inventory going down?