A business received $10,000 from a customer in payment of an amount owed. The effect of the transaction on the accounting equation was to:

A) increase one Asset, decrease another Asset.
B) increase an Asset, increase a Liability.
C) decrease an Asset, decrease a Liability.
D) increase an Asset, increase Owner's Equity.

Accounting Equation

The fundamental principle of accounting that states assets equal liabilities plus owner's equity (Assets = Liabilities + Owner's Equity).

Asset

Resources owned by a company that have economic value and can provide future benefits, such as cash, inventory, and equipment.

Liability

A liability refers to financial obligations or debts that a company owes and is required to repay in the future.