If a payment is received from accounts receivable:
A) shareholders' equity increases and an asset decreases.
B) an asset increases and a liability increases.
C) an asset decreases and a liability decreases.
D) one asset increases and another asset decreases.

Question

Quizplus · Accepted Answer

When a payment is received from accounts receivable, the company's cash balance (an asset) increases, while the accounts receivable balance (another asset) decreases. This transaction does not directly affect shareholders' equity or liabilities.

If a Payment Is Received from Accounts Receivable