Collection of a $500 Accounts Receivable
A) increases an asset $500; decreases an asset $500.
B) increases an asset $500; decreases a liability $500.
C) decreases a liability $500; increases owner's equity $500.
D) decreases an asset $500; decreases a liability $500.

Question

Quizplus · Accepted Answer

The collection of accounts receivable increases the asset account as it is now cash, and decreases the accounts receivable account as the amount has been collected. There is no change in liabilities or owner's equity.