If a Company Receives $20,000 Cash on Accounts Receivable and Uses

Multiple Choice

If a company receives $20,000 cash on accounts receivable and uses the cash to pay $20,000 on accounts payable then:

A) assets would increase by $20,000 while liabilities would decrease by $20,000.
B) liabilities would decrease by $20,000 while stockholders' equity would increase by $20,000.
C) assets would decrease by $20,000 while liabilities would decrease by $20,000.
D) liabilities would decrease by $20,000 while stockholders' equity would decrease by $20,000.