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

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Armani Rivera · Accepted Answer

Final Answer : B, Explanation :  When Atkins Company collects $1,750 from a customer, cash (an asset) increases by $1,750. Simultaneously, accounts receivable (another asset) decreases by $1,750 because the customer's debt is settled. This results in no net change in the accounting equation, as one asset increases while another decreases by the same amount.

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