Equity is increased when cash is received from customers in payment of a previously recorded accounts receivable.

Name: Equity is increased when cash is received from customers in payment of a previously recorded accounts receivable.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Receiving cash from customers in payment of a previously recorded accounts receivable does not increase equity; it merely shifts the composition of assets from accounts receivable to cash, with no impact on the equity balance.

Equity Is Increased When Cash Is Received from Customers in Payment