Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NAPowell Company collected cash from accounts receivable.AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?
(NA) (NA) (NA) (NA) (NA) (NA) (I)
Collecting cash from accounts receivable is an asset exchange transaction. It increases the asset account, Cash, (cash) and decreases the asset account, Accounts Receivable. Thus, there is no net effect on total assets and no effect on total liabilities and stockholder's equity. There is an inflow from operating activities on the statement of cash flows.
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