Asked by Frank pelicano on May 05, 2024
Verified
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.
- Understand the employment of the accounting equation within business transactions.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
A
Explanation :
Receiving $10,000 from a customer in payment of an amount owed increases the cash asset (one asset increases) and decreases accounts receivable (another asset decreases), with no effect on liabilities or owner's equity.
Learning Objectives
- Understand the employment of the accounting equation within business transactions.