Multiple choice

What is the effect on the net asset if cash received from debtors is Rs. 75,000?

  1. It will increase by 75,000.

  2. It will decrease by 75,000.

  3. There will be no change.

  4. It will decrease by Rs. 75,000 - 25,000= 50,000.

  5. None of the above

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This is the correct option. Debtors have decreased and cash has increased, but total value of assets and liabilities remains the same.

Net asset = Total assets - total liabilities