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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