How does receiving a bill to be paid next month for services received affect the accounting equation? a. liabilities increase; owner's equity increases b. assets decrease; owner's equity decreases c. liabilities increase; owner's equity decreases d. assets increase; liabilities increase

c. liabilities increase; owner's equity decreases

Explanation:

Accounting Equation is represented by the following formula:

Assets = Liabilities + Owner's Equity

When a bill to be paid next month is received in the current month, it establishes a liability, and expense account is debited whereas a due liability account is credited.

This would reduce the profits which would in turn reduce the owner's equity and at the same time increase the liabilities amount.