Echols Company Sells Merchandise on Credit

question 199

Multiple Choice

Echols Company sells merchandise on credit. If a customer pays its balance due after the discount period has passed, what is the effect of the payment on seller's accounting equation?

• A)Assets and stockholders' equity decrease.
• B)Assets and stockholders' equity increase.
• C)Assets decrease and liabilities increase.
• D)No net effect.

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