Viscount Company collected $42,000 cash on its accounts receivable.How does this transaction affect the company's accounting equation?
A)Assets decrease and equity increases
B)Both assets and liabilities decrease
C)Assets,liabilities,and equity are unchanged
D)Both assets and equity are unchanged and liabilities increase
E)Assets increase and equity decreases

Question

Quizplus · Accepted Answer

Collecting cash on accounts receivable increases cash (an asset) and decreases accounts receivable (another asset) by the same amount, leaving the total assets unchanged. Liabilities and equity are not affected by this transaction.

Viscount Company Collected $42,000 Cash on Its Accounts Receivable