If a Company Is Paid $20,000 on Accounts Receivable and Uses

Multiple Choice

If a company is paid $20,000 on accounts receivable and uses the money 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 shareholders' equity would increase by $20,000.
C) Both assets and liabilities would decrease by $20,000.
D) Both assets and shareholders' equity would decrease by $20,000.