Viscount Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

A) Total assets decrease and equity increases.
B) Both total assets and total liabilities decrease.
C) Total assets, total liabilities, and equity are unchanged.
D) Both total assets and equity are unchanged and liabilities increase.
E) Total assets increase and equity decreases.

Question

MUHAMMAD ABRAR BHAT · Accepted Answer

Final Answer : C, Explanation :  Collecting cash on accounts receivable does not change the total assets, total liabilities, or equity. It merely shifts the composition of the assets from accounts receivable to cash, leaving the overall accounting equation unchanged.

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