A Business Collects $5,000 from Its Customer Which Was Owed

question 51

Multiple Choice

A business collects $5,000 from its customer which was owed since a previous month. How does this affect the accounting equation of the business?

• A)Assets increase by $5,000; liabilities decrease by $5,000.
• B)Assets increase by $5,000; assets decrease by $5,000.
• C)Assets increase by $5,000; liabilities increase by $5,000.
• D)Assets increase by $5,000; equity increases by $5,000.

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Definitions:

Completed During

Usually refers to the tasks, projects, or productions that are finished within a specific period.

Equivalent Units

A concept used in cost accounting to indicate a quantity of production expressed in terms of fully completed units, calculated to measure and assign costs to partially completed goods.

Material Costs

Material Costs are the expenses incurred for the materials that are used in the production process of goods or services.

First-In, First-Out

An inventory valuation method which assumes that the first items purchased or manufactured are the first ones sold.