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liabilities increase; stockholders' equity decreases.
This is how receiving an invoice to be paid next month for services received has an effect on the accounting equation.
A liability is something that an individual or organization owes, commonly an economic amount. Liabilities are settled through the years via the switch of monetary benefits, along with money, items, or offerings.
A liability is a legally binding responsibility to another entity. Liabilities are incurred to finance the continuing activities of a business enterprise. Examples of money owed payable are commercial enterprise accounts payable, gathered prices, accrued wages, and amassed taxes.
In economic accounting, legal responsibility is defined as the future sacrifice of financial advantages that an organization has to make to any other employer due to past transactions or other activities.
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