Multiple choice

Payment received from Debtor _________________.

  1. decreases the Total Assets

  2. increases the Total Assets

  3. results in no change in the Total Assets

  4. increases the Total Liabilities

  5. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Payments received from debtors results in decrease of debtors and increase in cash. It does not result in any change in the total assets as decrease in one asset is compensated by increase in the other asset.

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