Knowledge Check $02$

Microlith received $$20,000$ cash in advance from customers. Which of the following statements correctly shows the effect of this transaction on the accounting equation?

Multiple Choice

Assets will decrease by $$20,000,$ liabilities will remain unchanged, and stockholders' equity will increase by $$20,000$

Assets will remain unchanged, liabilities will increase by $$20,000,$ and stockholders' equity will increase by $$20,000$

Assets will increase by $$20,000,$ liabilities will increase by $$20,000,$ and stockholders' equity will remain unchanged

Assets will increase by $$20,000,$ liabilities will remain unchanged, and stockholders' equity will increase by $$20,000$