If a Business Receives $5,000 on Account from Clients Who

question 43

Multiple Choice

If a business receives $5,000 on account from clients who owed money for services previously billed, identify the effect on the accounting equation:

• A)assets decrease and liabilities increase.
• B)assets remain the same and owner's equity remains the same.
• C)liabilities decrease and owner's equity decreases.
• D)owner's equity increases and revenue increases.

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Definitions:

Proposition

A unit of meaning that is made up of concepts and expresses a single idea.

Mental Set

A cognitive framework or mindset that influences how a person approaches and solves problems, often based on past experiences and perceptions.

New Problems

Issues or challenges that have not been previously encountered or recognized.

Confirmation Bias

The tendency to interpret new evidence as confirmation of one's existing beliefs or theories.