For the following transaction,identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Issued Capital + Opening retained profits + Revenue - Expenses - Dividends
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A payment was made to a creditor.
A) A liability increased and another liability decreased.
B) An asset decreased and a liability decreased.
C) An asset increased and revenue increased.
D) An asset decreased and an expense increased.

Question

Quizplus · Accepted Answer

A payment made to a creditor would result in a decrease in assets (cash or accounts payable) and a decrease in liabilities (accounts payable). This would lead to a decrease in both sides of the equation, and the only option that reflects this change is B.

For the Following Transaction,identify the Type of Change That Would