Marsh Supply Services received $1,000 cash from a customer which was owed to the business from the previous month.What is the effect of the cash receipt on the accounting equation?

Question

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The cash receipt of $1,000 will increase the cash account, which is an asset. At the same time, the amount owed by the customer is reduced, leading to a decrease in accounts receivable, which is also an asset. There is no change in stockholders' equity or accounts payable as this transaction only involves cash and accounts receivable.

Marsh Supply Services Received $1,000 Cash from a Customer Which