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
-
A cheque was drawn to pay an account payable.
A) A liability increased and another liability decreased.
B) An asset decreased and a liability decreased.
C) An asset decreased and an expense increased.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

When a cheque is drawn to pay an account payable, an asset (cash) decreases and a liability (accounts payable) also decreases. This results in a decrease in the overall amount on both the asset and liability side of the accounting equation. Therefore, the answer is B.

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