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Financial Accounting

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Effect of a Credit Collection on Financial Statements

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FINACT-NJLUNJ

On July 25, Lucky Tee, a custom apparel manufacturer, collected the balance owed from a customer from a prior month sale “on account.” This transaction affected the apparel company's financial statement elements as follows:

A

Assets and liabilities increased.

B

Assets and liabilities decreased.

C

Assets and owner’s equity increased.

D

Assets and owner's equity decreased.

E

Liabilities decreased and owner's equity increased.

F

Lucky Tee's financial statement elements were not impacted by this transaction.