Final answer:
When a collection is made within the discount period, a sales discount will be recorded, which decreases equity. Cash collection is an increase in assets. True.
Step-by-step explanation:
The statement is true. When a collection is made within the discount period, a sales discount will be recorded, resulting in a decrease in equity. This is because the discount represents a reduction in the selling price of the goods sold, which ultimately reduces the revenue and consequently the equity.
Cash collection, on the other hand, represents an increase in assets. When the customer pays for the goods or services, the cash is received, leading to an increase in the asset account.