Cash is collected from a customer who was previously put on account. How does the collection of the cash affect the accounting equation?
A) Assets increase; owner's equity increases.
B) Assets increase; liabilities increase.
C) Assets increase; assets decrease.
D) Assets decrease; owner's equity decreases.

Question

Quizplus · Accepted Answer

The collection of cash increases the cash asset while decreasing the accounts receivable asset, leaving the overall accounting equation unchanged.

Cash Is Collected from a Customer Who Was Previously Put