The Effect on the Accounting Equation of the Business Paying

question 52

Multiple Choice

The effect on the accounting equation of the business paying $275 cash for mobile phone charges is:

• A)a decrease in the asset cash of $275 and a decrease in the liability accounts payable of $275
• B)a decrease in the asset cash of $275 and a decrease in profit and loss of $275 to record the phone expense.
• C)an increase in the asset cash of $275 and a decrease in profit and loss of $275 to record the phone expense.
• D)a decrease in the asset cash of $275 and an increase in profit and loss of $275 to record the phone expense.

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Definitions:

Economics

Economics is the social science that studies how individuals, governments, firms, and nations make choices on allocating resources to satisfy their wants and needs, trying to determine how these groups should organize and coordinate efforts to achieve maximum output.

Politics

The activities, actions, and policies that are used to gain and hold power in a government or to influence the government.

Class Consciousness

An awareness of one's own social class and its position within the broader societal class structure, often associated with a sense of solidarity and collective action among members of the same class.

Objective Economic

The study or approach that deals with economic phenomena based on objective analysis and facts, disregarding personal feelings or interpretations.