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Examveda

Which of the following is true when a debtor pays his dues?

A. The asset side of the balance sheet will decrease

B. The asset side of the balance sheet will increase

C. The liability side of the balance sheet will increase

D. There is no change in total assets or total liabilities

Answer: Option D

Solution(By Examveda Team)

When a debtor pays his dues there is no change in total assets or total liabilities because debtor in current assets decrease and cash & bank in current assets increase.

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Comments ( 2 )

  1. Ali Mujtaba
    Ali Mujtaba :
    1 year ago

    A Debtor is a current Asset under Accounts Receivable in a Balance Sheet. When an organization collected money from the debtor it's impacting in Balance Sheet Increase Cash/ Bank (CA) and decreases in Acc. Receivable (debtor) a/c. In the above MCQ option :D is wrong.

  2. Tsewang Nurboo
    Tsewang Nurboo :
    3 years ago

    Why that happened explain me

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