Collection of a $3500 Accounts Receivable decreases a liability $3500; increases stockholders' equity $3500. decreases an asset $3500; decreases a liability $3500. increases an asset $3500; decreases an asset $3500. increases an asset $3500; decreases a liability $3500.

Question

Business

Giselle Alvarez

27 May, 17:58

Collection of a $3500 Accounts Receivable decreases a liability $3500; increases stockholders' equity $3500. decreases an asset $3500; decreases a liability $3500. increases an asset $3500; decreases an asset $3500. increases an asset $3500; decreases a liability $3500.

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Answers (1)

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Chace Salas · Answer 1

Correct option is C. increases an asset $3500; decreases an asset $3500

Explanation:

Before collection from accounts receivable there is an asset of $3,500 in accounts receivable.

When it is received then there is collection of $3,500 either in cash or at bank, with that the effect on accounts receivable asset is that it is reduced, by $3,500; and with the same thing cash or bank balance which is also an asset is increased.

Therefore correct option is C.

increases an asset $3500; decreases an asset $3500

Increase in Cash/Bank

Decrease in Accounts Receivable