Which of the following transactions will cause both the left and right side of the accounting equation to decrease?
A)Collecting cash from a customer who owed us money.
B)Paying a supplier for inventory we previously purchased on account.
C)Borrowing money from a bank.
D)Purchasing equipment using cash.

Question

Quizplus · Accepted Answer

When a company pays a supplier for inventory previously purchased on account, it decreases its liabilities (accounts payable) and its assets (cash), thus reducing both sides of the accounting equation.

Which of the Following Transactions Will Cause Both the Left