Newton Corporation Settles a Liability by Making a Payment in Cash

question 92

Multiple Choice

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

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

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Definitions:

Nasal Cavity

The large air filled space above and behind the nose in the middle of the face, an important part of the respiratory system.

Higher Altitudes

Regions located at a great height above sea level, often associated with lower atmospheric pressure and decreased oxygen levels.

Partial Pressure

The pressure that a single component of a mixture of gases would exert if it alone occupied the entire volume of the mixture at the same temperature.

Atmospheric Gases

The gases that make up Earth's atmosphere, including nitrogen, oxygen, carbon dioxide, and argon, among others.