TRUE OR FALSE:

A $5,050 receipt of cash from clients who make monthly payments will increase owner’s equity $5,050, so you should assume the services were recorded as accounts receivable in a prior month.

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Originally Posted by Ganjafarmer420

TRUE OR FALSE:

A $5,050 receipt of cash from clients who make monthly payments will increase owner's equity $5,050, so you should assume the services were recorded as accounts receivable in a prior month.

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Probably, but accounts receivable have only an indirect relationship with equity. In accounting you should not assume anything as to assume makes an a$$ out of u and me, rather you should examine the accounts receivable ledger to determine if the payment meets an outstanding balance or reconciles with an entry