What Entry will increases liability and revenue?

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Answer

1079321

2026-03-05 17:45

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There is no way to increase Revenue and Liabilities in a single transaction. Another reason for this is the accounting equation.

Assets = Liabilities + Owners Equity

In double entry accounting there must be a debit and a credit that equals. You want to "increase" liabilities and revenue with a single entry, this cannot be done because and increase in liabilities relies on a credit entry as does an increase in revenue.

Assets maintain a Debit Balance, meaning they increase with a debit.

Liabilities maintain a Credit Balance, meaning the increase with a credit.

Owners Equity maintains a Credit Balance, increasing with credit.

Revenue is an OWNERS EQUITY ACCOUNT and therefore increases with a credit.

Say you desired to increase Liabilities $500 and Revenue $500 in a single entry, you couldn't because you'd need to "credit" liabilities $500 and "credit" revenue $500, but you MUST have a "debit" that equals the same amount of credits.

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