Go Blue Retail Store collected $10,000 of its accounts receivable.The expanded accounting equation changes include:
A)Cash and Capital increase,$10,000.
B)Cash and Revenue increase $10,000.
C)Cash increases and Accounts Receivable decreases $10,000.
D)Accounts Receivable decreases and Capital increases $10,000.

Question

Quizplus · Accepted Answer

When Go Blue Retail Store collects $10,000 of its accounts receivable, cash increases by $10,000 and accounts receivable decreases by $10,000. The expanded accounting equation can be represented as:
Assets = Liabilities + Equity
Cash + Accounts Receivable = 0 + Equity
After the collection, the equation would be:
Cash + $10,000 = 0 + Equity
Therefore, cash increases and accounts receivable decreases by $10,000. There is no impact on revenue or capital, so options A, B, and D are incorrect.

Go Blue Retail Store Collected $10,000 of Its Accounts Receivable