A Business Settles a Liability by Making a Payment in Cash

question 7

Multiple Choice

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

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

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Definitions:

Polygamous Mating

A mating system in which an individual has multiple mating partners during a breeding season, allowing for a higher potential for genetic diversity.

Imprinted Gene

A gene that is expressed in a parent-of-origin-specific manner; that is, the expression depends on whether the gene is inherited from the mother or the father.

Developing Fetus

A developing fetus refers to an unborn offspring in the process of growth and development inside the mother's uterus.

Offspring-Offspring Conflict

A situation in which siblings compete for resources or parental investment, often leading to conflict within families.