Question

What effect would cash collected on accounts receivable produce on the balance sheet?

Answer 1

Cash collected on accounts receivable would increase the cash asset and decrease the accounts receivable asset on the balance sheet.

Step-by-step explanation:

The effect cash collected on accounts receivable would produce on the balance sheet is an increase in the cash asset and a decrease in the accounts receivable asset. When a company collects cash from its customers who previously owed money (accounts receivable), it increases its cash balance. At the same time, the company reduces the amount recorded under accounts receivable, as the customers have now paid their debts.