Homework Answers
Answer : FALSE
Above answer is explained below in detail:
When cash is received from customers regarding the payment of previously recorded accounts receivables then the cash position is increased and accounts receivables was decreased. By this transaction there is no change in the current assets position of the concern. It doesn't have any influence on the stockholder's equity.
Stockholder's equity is changed on the basis of the composition of capital structure and profits available after the payment of all obligations like interest, bills payable, taxes etc., The residue which is available after the payment of taxes will have its influence on the stockholder's equity on the basis of dividend decision. It involves whether to distribute the profits as dividends or to retain the profits to increase the shareholders wealth. But cash received from accounts receivables will not have its direcr impact on stockholder's equity.
Hence the given statement is false.
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