If a Company Is Paid $20,000 on Accounts Receivable and Uses

question 68

Multiple Choice

If a company is paid $20,000 on accounts receivable and uses the money to pay $20,000 on accounts payable then:

• A)assets would increase by $20,000 while liabilities would decrease by $20,000.
• B)liabilities would decrease by $20,000 while shareholders' equity would increase by $20,000.
• C)Both assets and liabilities would decrease by $20,000.
• D)Both assets and shareholders' equity would decrease by $20,000.

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Definitions:

Dendrites

Extensions of a neuron that receive signals from other neurons and conduct them toward the cell body.

Nerve Fibers

Extensions of nerve cells that transmit electrical impulses between different parts of the body, essential for communication within the nervous system.

Glial Cell

Cells within the central and peripheral nervous system that are not neurons, which serve to support and safeguard neuronal cells.

Oligodendrocyte

A type of glial cell in the central nervous system that produces myelin, a substance that insulates nerve fibers to enhance signal transmission.