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If a Company Receives $20,000 Cash from Its Customers on Account

Question 63

Multiple Choice

If a company receives $20,000 cash from its customers on account and uses the cash to pay $20,000 to its suppliers on accounts,the net result is that:


A) assets would increase by $20,000 while liabilities would decrease by $20,000.
B) liabilities would decrease by $20,000 while stockholders' equity would increase by $20,000.
C) assets would decrease by $20,000 and liabilities would decrease by $20,000.
D) liabilities would decrease by $20,000 and stockholders' equity would decrease by $20,000.

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