Collecting Cash on Account Causes

question 49

Multiple Choice

Collecting cash on account causes:

• A)assets to increase and owner's equity to decrease.
• B)assets to increase and liabilities to increase.
• C)assets to increase and owner's equity to increase.
• D)no change in total assets.

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Definitions:

Government Backing

Support or endorsement provided by a government, which can include financial guarantees, subsidies, or other forms of assistance.

Ordinary Course

Actions and transactions that are routine or normal for a particular business or industry, typically excluding extraordinary or unusual activities.

Security Interest

A legal claim or lien on collateral that gives a lender the right to repossession if the borrower defaults on the agreement.

Legal Enforceability

The characteristic of a contract or agreement that allows it to be upheld or compelled by law.