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

question 93

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 one 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

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Definitions:

Treaties

Formal agreements between two or more sovereign states, governed by international law, covering a wide range of topics such as peace, trade, and borders.

Harriet Beecher Stowe

An American abolitionist and author, best known for her novel "Uncle Tom's Cabin," which depicted the harsh life for African Americans under slavery.

Novel

A long, fictional narrative in prose form, exploring character, action, and sometimes setting, distinguishing it from shorter stories or novellas.

Slaves

Individuals forced into servitude, deprived of personal freedom, and compelled to perform labor or services against their will under threat of punishment.