Question

Collection of a $3500 Accounts Receivable decreases a liability $3500; increases stockholders' equity $3500. decreases an asset $3500; decreases a liability $3500. increases an asset $3500; decreases an asset $3500. increases an asset $3500; decreases a liability $3500.

Answer 1

Answer:

Correct option is C. increases an asset $3500; decreases an asset $3500

Explanation:

Before collection from accounts receivable there is an asset of $3,500 in accounts receivable.

When it is received then there is collection of $3,500 either in cash or at bank, with that the effect on accounts receivable asset is that it is reduced, by $3,500; and with the same thing cash or bank balance which is also an asset is increased.

Therefore correct option is C.

increases an asset $3500; decreases an asset $3500

Increase in Cash/Bank

Decrease in Accounts Receivable