What Is the Effect on the Accounting Equation When a Company

question 58

Multiple Choice

What is the effect on the accounting equation when a company collects an account receivable?

• A)Total assets increase,total liabilities increase,and total shareholders' equity stays the same.
• B)Total assets stay the same,total liabilities stay the same,and total shareholders' equity stays the same.
• C)Total assets decrease,total liabilities stay the same,and total shareholders' equity decreases.
• D)Total assets stay the same,total liabilities increases,and total shareholders' equity decreases.

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Definitions:

Low Cost

The strategy or condition of offering products or services at a lower price than competitors, aimed at attracting consumers or achieving higher sales volumes.

Rapid Response

The ability to react quickly and effectively to unforeseen circumstances or emergencies.

Modular Design

A design approach that subdivides a system into smaller parts or modules that can be independently created and then used in different systems to drive multiple functionalities.

Tangible Products

Physical items that can be seen, touched, and owned, as opposed to services or digital goods.