Collection of account receivable will
Correct answer: A. Increase assets and decrease assets
- A. Increase assets and decrease assets
- B. Increase assets and decrease liabilities
- C. Increase assets and increase capital
- D. Increase assets and increase cash
Explanation
Collecting a receivable changes one asset into another: cash increases while accounts receivable decreases. Total assets remain unchanged, so option a correctly describes the two effects.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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