A corporation received $550 from a customer as a deposit and the company uses cash basis accounting. The effect of this transaction is to:

Increase assets

Explanation:

Given that

Amount received = $550

Since the amount is received from a customer $550 that increase the cash balance which ultimately increases the asset account so we debited the cash account and credited the account receivable account

The journal entry would be

Cash A/c Dr $550

To Account receivable A/c $550

(Being the cash is received from a customer)