Stannous Company Earns $10,000 of Revenue on Account in Year

Multiple Choice

Stannous Company earns $10,000 of revenue on account in Year 1. Cash collections of receivables amount to $3,500 in Year 1 with the remainder being collected in Year 2. Which of the following shows how the collection of cash will affect the company's accounting equation in Year 1?

A) Option A
B) Option B
C) Option C
D) Option D