Question $12$

$1$ pts

What happens to the fundamental accounting equation $)=(L+E$ of a company when the owner pays back the amount he has borrowed from his business? His borrowing had been correctly recorded at the time.

Total assets increase, total liabilities decrease, and owners' equity amount remains the same.

Total assets increase, total liabilities remain the same, and owners' equity increases.

Cash balance decreases while Account Receivable balance increases. Liability and owners' equity remain the same.

Cash balance increases while Account Receivable balance decreases. Both liabilities and equity remain the same.