ABC Company has the following accounts and normal balances. Cash $4,000, Accounts Receivables $8,000, Allowance for Doubtful Accounts $500, Accounts Payable $2,500, Unearned Revenue $4,000, Revenue $9,000, Rent Expense $1,000, Wage Expense $4,000 and Capital of $1,000. Use this information to answer questions 1 4.

Our company performs $2,000 of services and receives $500 in cash and the balance will be received at a later date. The effect of this transaction is: a. Assets increase by $500 b. Revenues increase by $500 c. Net income increases by $2,000 d. Net income increases by $500