Vic's Mart collects $700 of its accounts receivable.The expanded accounting equation impact is:
A)Cash and Capital increase $700.
B)Cash and Revenue increase $700.
C)Cash increases and Accounts Receivable decreases $700.
D)Accounts Receivable decreases and Capital increases $700.

Question

Quizplus · Accepted Answer

When Vic's Mart collects $700 of its accounts receivable, it means they are receiving cash for the amount owed to them. This results in an increase in the Cash account and a decrease in the Accounts Receivable account, as the debt has been cleared. However, since this is not revenue earned from sales, it does not impact the Revenue account. Capital, being an owner's equity account, is not affected by the transaction directly. Therefore, the correct answer is C.

Vic's Mart Collects $700 of Its Accounts Receivable