A Business Settles a Liability by Making a Payment with Cash

question 126

Multiple Choice

A business settles a liability by making a payment with cash. How does paying this liability affect the accounting equation?

• A)Liabilities decrease; owners' equity increases.
• B)Assets decrease; liabilities decrease.
• C)Assets increase; liabilities increase.
• D)Assets increase; liabilities decrease.

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Definitions:

Geographical Boundaries

Refers to the physical limits of a specific area or environment as determined by natural or artificial barriers.

Mentoring Relationship

A dynamic, reciprocal relationship in a work environment between an advanced career incumbent (mentor) and a beginner (mentee), aimed at promoting the career development of both.

Cultivation

In media studies, the process by which heavy television viewers develop a perception of reality more consistent with the world as portrayed in media than with the actual world.

Mutual Sharing

A process or practice where individuals or groups exchange information, resources, or benefits equally among each other.