Asked by Khalid Ahmed Daamseh on May 31, 2024
Verified
The payment of accounts payable would:
A) increase both Assets and Liabilities.
B) increase Assets and decrease Liabilities.
C) decrease both Assets and Liabilities.
D) decrease Assets and increase Liabilities.
Assets
Resources owned or controlled by a company, which are expected to provide future economic benefits.
Liabilities
financial obligations or debts that a business needs to settle in the future, such as loans, accounts payable, and mortgages.
- Analyze how business operations affect the accounting equation's stability.
- Scrutinize the effect of varied transactions on Assets, Liabilities, and Owner's Equity.
Verified Answer
SV
Shivam Vaish
May 31, 2024
Final Answer :
C
Explanation :
Paying off accounts payable decreases the cash asset (or whichever asset is used for the payment) and decreases the accounts payable liability, thus decreasing both assets and liabilities.
Learning Objectives
- Analyze how business operations affect the accounting equation's stability.
- Scrutinize the effect of varied transactions on Assets, Liabilities, and Owner's Equity.
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