Atkins Company Collected $1,750 as Payment for the Amount Owed

question 170

Multiple Choice

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

• A) Assets would increase $1,750 and equity would increase $1,750.
• B) Liabilities would decrease $1,750 and equity would increase $1,750.
• C) One asset would increase $1,750 and a different asset would decrease $1,750, causing no net change in the accounting equation.
• D) Assets would decrease $1,750 and liabilities would decrease $1,750.
• E) Assets would increase $1,750 and liabilities would increase $1,750.

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