If a Company Paid $38,000 of Its Accounts Payable in Cash,what

question 108

Multiple Choice

If a company paid $38,000 of its accounts payable in cash,what was the effect on the accounting equation?

• A)Assets would decrease $38,000,liabilities would decrease $38,000,and equity would decrease $38,000.
• B)Assets would decrease $38,000,liabilities would decrease $38,000,and equity would increase $38,000.
• C)Assets would decrease $38,000 and liabilities would decrease $38,000.
• D)There would be no effect on the accounts because the accounts are affected by the same amount.
• E)Assets would increase $38,000 and liabilities would decrease $38,000.

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Definitions:

Federal Government Revenue

The income the government receives from taxes, fees, and other sources to fund public services and goods.

State

Is an organized political community under one government; can refer to a country or a specific government jurisdiction within a country.

Local Government Revenue

The funds collected by municipalities and local authorities through various means such as taxes, fees, and grants, which are used to finance public services and infrastructure.

Expenditures

The act of spending funds or using resources to acquire goods and services.