The payment of a liability: a

Accounting Dec 16, 2020

The payment of a liability:

a. decreases assets and liabilities.

b. decreases assets and equity.

c. increases assets and decreases liabilities.

d. decreases assets and increases liabilities.

e. None of the above

Expert Solution

The correct answer is option (a).

The payment of a liability decreases assets and liabilities.

Explanation: The payment of a liability decreases assets and liabilities as the liability could be paid only through paying cash or cash equivalents hence it decreases the asset when liability is paid off then it is decreased.

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