If a company received $20,000 as a payment on accounts receivable and used the money to pay $20,000 on accountspayable, then: CIRCLE ONE:૧. both assets and shareholders' equity would decrease by $20,000b. both assets and liabilities would decrease by $20,000C. assets would increase by $20,000 while liabilities would decrease by $20,000d. liabilities would decrease by $20,000 while shareholders' equity would increase by $20,000

The correct answer is: (B) both assets and liabilities would decrease by $20,000.

Answered: If a company received $20,000 as a…

If a company received $20,000 as a payment on accounts receivable and used the money to pay $20,000 on accounts payable, then: CIRCLE ONE:

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter2: Basic Accounting Systems: Cash Basis

Section: Chapter Questions

Problem 2SEQ: The receipt of $8,000 cash for fees earned was recorded by Langley Consulting as an increase in cash...

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Question

If a company received $20,000 as a payment on accounts receivable and used the money to pay $20,000 on accounts
payable, then: CIRCLE ONE:
૧. both assets and shareholders' equity would decrease by $20,000
b. both assets and liabilities would decrease by $20,000
C. assets would increase by $20,000 while liabilities would decrease by $20,000
d. liabilities would decrease by $20,000 while shareholders' equity would increase by $20,000

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