Question

Powers Corporation received a cash advance of $500 from a customer. As a result of this a event,
(a) assets increased by $500 (Debited).
(b) equity increased by $500 (Credited).
(c) liabilities decreased by $500 (Debited).
(d) Both assets and equity increased by $500 (Debited and Credited)​

Answer 1

Answer:

(a) assets increased by $500 (debited)

Answer 2

Powers Corporation received a cash advance of $500 from a customer. As a result of this event, the answer will be (a) assets increased by $500 (Debited).

Explanation:

• Since it is the Power Corporation is on the receiving end of the cash advance, the assets of the corporation will increase by $500 as the fund is being provided by the customer.
• Therefore the fund is debited from the customer (or their account) and credited to the corporation's account.
• During the process of debiting a cash advance, the amounts do not go toward your revolving account. Instead, you may borrow funds directly through your bank account with this form of short-term loan.