Go Blue Retail Store collected $12,000 of its accounts receivable. The expanded accounting equation changes include
A) Cash and Capital increase, $12,000.
B) Cash and Revenue increase $12,000.
C) Cash increases and Accounts Receivable decreases $12,000.
D) Accounts Receivable decreases and Capital increases $12,000.

Question

Quizplus · Accepted Answer

When Go Blue Retail Store collects $12,000 from its accounts receivable, it means that it received cash (asset) while reducing the amount of accounts receivable (asset). Therefore, the expanded accounting equation changes are: Cash increases and Accounts Receivable decreases by $12,000. There is no change in capital or revenue as no new revenue is being earned, and the collection of accounts receivable does not impact capital directly.

Go Blue Retail Store Collected $12,000 of Its Accounts Receivable