Collection of an $800 accounts receivable
A)increases an asset $800; decreases a liability $800.
B)decreases a liability $800; increases shareholders' equity $800.
C)decreases an asset $800; decreases a liability $800.
D)has no effect on total assets.

Question

Quizplus · Accepted Answer

Collecting an accounts receivable of $800 simply converts one asset (accounts receivable) into another asset (cash), without changing the total amount of assets. It does not affect liabilities or shareholders' equity.

Collection of an $800 Accounts Receivable