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Nonamiya [84]
4 years ago
9

Montgomery equipment rental company received​ $1,000 cash from a​ customer; the amount was owed to the business from the previou

s month. what is the effect of this transaction on the accounting​ equation?
Business
1 answer:
Zanzabum4 years ago
8 0

The correct answer is that this payment will have no effect on the accounting equation.

The accounting equation is Assets=Liabilities + Owner’s Equity. The journal entry for this transaction will be a debit to Cash and a credit to Accounts Receivable for $1,000. Since both of these accounts are Assets there will be no change to the asset balance.

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