A customer pays a $12,400 invoice that was already recorded in accounts receivable. What happens to accounts receivable?
Correct Answer
D) It decreases by $12,400.
Collecting an existing receivable reduces accounts receivable by the amount collected.
Why This Is the Correct Answer
Collecting an existing receivable reduces accounts receivable by the amount collected.
Why the Other Options Are Wrong
Option A: It increases by $12,400.
It increases by $12,400. is not aligned with the supported result for accounts receivable; it has the wrong label or classification even if the number looks close.
Option B: It becomes accounts payable.
It becomes accounts payable. puts the item in the wrong financial bucket, timing, base, or comparison for accounts receivable.
Option C: Leave the receivable open and post the cash receipt to an unapplied cash account.
Leave the receivable open and post the cash receipt to an unapplied cash account. puts the item in the wrong financial bucket, timing, base, or comparison for accounts receivable.
Memory Technique
Accounts drawer for Recording Customer: label collecting before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Accounts receivable from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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