Outback Bull Bars invoices a customer $400 for maintenance services supplied on credit. What is the effect of this transaction on the accounting equation?

The accounting equation is: Assets = Liabilities + Equity.

When Outback Bull Bars invoices a customer $400 for maintenance services supplied on credit, it increases the company's Accounts Receivable (an asset) by$400.

At the same time, it also increases the company's Service Revenue (part of Equity) by $400.

So, the effect on the accounting equation is:

• Assets (Accounts Receivable) increase by $400
• Equity (Service Revenue) increases by $400

Therefore, the accounting equation remains in balance. The increase in assets is offset by an equal increase in equity.