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WAEC 2024

A sole trader received the sum of # 4,860 cash from a debtor. The effect of this transaction in the balance sheet is

  1. Adecrease in stock and increase in debtor.
  2. Bdecrease in asse and increase in liability.
  3. Cincrease in cash and decrease in debtor.
  4. Dincrease in cash and decrease in capital.

Explanation

Receiving cash from a debtor increases the cash balance (an asset) and simultaneously reduces the amount owed by debtors (another asset). The overall value of total assets remains unchanged.

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