When collection is made on Accounts Receivable,
A) stockholders' equity increases.
B) total assets decrease.
C) total assets remain the same.
D) total assets increase.

Question

Quizplus · Accepted Answer

When collection is made on accounts receivable, there is a decrease in accounts receivable (an asset account) and an increase in cash (another asset account), which results in no overall change in total assets. Therefore, choice C is the correct answer. Stockholders' equity is not affected by the collection of accounts receivable.

When Collection Is Made on Accounts Receivable