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What effect does the prepayment of insurance for six months have on the accounting equation? Assets would decrease and stockholders' equity would increase. Assets and liabilities would decrease. Assets and stockholders' equity would decrease. Total assets, liabilities, and stockholders' equity would not change. What effect does collection on account from a customer have on the accounting equation? Assets increase and liabilities decrease. Total assets, liabilities, and stockholders' equity do not change. Assets and stockholders' equity increase. Assets and liabilities increase