Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit.How does this transaction affect the accounting equation for Atkins?
A)Assets would decrease $1,750 and liabilities would decrease $1,750.
B)One asset would increase $1,750 and a different asset would decrease $1,750,causing no effect.
C)Assets would increase $1,750 and equity would increase $1,750.
D)Assets would increase $1,750 and liabilities would increase $1,750.
E)Liabilities would decrease $1,750 and equity would increase $1,750.

Question

Quizplus · Accepted Answer

The transaction involves collecting cash (an asset) and reducing accounts receivable (another asset) by the same amount, resulting in no net effect on the accounting equation.

Atkins Company Collected $1,750 as Payment for the Amount Owed