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:

Energy Metabolism

The process by which living organisms produce energy, through the conversion of food into usable chemical energy.

Closed System

An entity that does not exchange energy with its surroundings. Compare with open system.

Noncompetitive Inhibition

The binding of a substance (the noncompetitive inhibitor) to a site other than the active site of an enzyme, thereby lowering the rate at which the enzyme catalyzes a reaction. Compare with competitive inhibition.

Catalysts

Compounds that accelerate the speed of chemical reactions without being used up during the reaction.