Receiving Cash from a Customer to Pay for a Previously

question 117

Multiple Choice

Receiving cash from a customer to pay for a previously recorded account receivable will:

• A) increase total assets.
• B) have no effect on total assets.
• C) decrease liabilities.
• D) increase stockholder's equity.

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Definitions:

Assets

Assets are resources owned by a company or individual that have economic value and can provide future benefits, like cash, inventory, and equipment.

Increase

An upward movement or growth in value, amount, or any measurable attribute.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim on the company's resources.

Revenues

The total income generated by a company from its business activities, typically from the sale of goods or services before any expenses are subtracted.