A Business Paid $7,000 to a Creditor in Payment of an Amount

question 11

Multiple Choice

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

• A) increase an asset, decrease another asset
• B) decrease an asset, decrease a liability
• C) increase an asset, increase a liability
• D) increase an asset, increase stockholders' equity

---

Definitions:

Child Labor

The employment of children in any work that deprives them of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially, or morally harmful.

Employment-At-Will Doctrine

A legal principle that allows employers to terminate employees at any time without reason, just as employees can leave at any time without reason, absent a contractual or statutory exception.

Retaliatory Discharge

The act of an employer firing an employee as a form of punishment for engaging in legally protected activities.

Discharge Without Cause

is the termination of employment without a specified reason, often subject to legal and ethical considerations.