Determination of effect of the listed transactions of Nikea Inc. on the accounting equation:
It is given that In May 2013, Nikea recorded the transaction by debiting accounts receivable for $10,000 and crediting service revenues for $10,000.
Accounts receivable is an asset and debiting assets means increasing the asset. A Service revenue is part of equity and crediting the revenue means increasing the equity.
Hence we can say that this transaction as increased the assets and equity of Nikea Inc.
