Global Flash, a local music company, was hired by a bride to DJ her wedding
reception at the Monteleone Hotel on this past Saturday, September No fee or
deposit was collected in advance, and nothing was recorded prior to the event. At
the reception, the full fee was collected in cash from the hotel wedding coordinator
at the end of the evening. Recording this transaction on the company's books the
next business day, which is today Monday, September :
A Involved debiting Cash and crediting Revenue.
B Caused an increase in assets, and a decrease in both liabilities and owners' equity.
C Caused an increase in assets, a decrease in owners' equity, and had no effect on revenue.
D Violated the matching principle because nothing should have been recorded until Friday,
October when the music company paid the DJ and his road crew for their services.
