When a Payment Is Made on an Account Payable

question 116

Multiple Choice

When a payment is made on an account payable:

• A)Assets and stockholders' equity decrease.
• B)Assets and liabilities decrease.
• C)Liabilities and revenues decrease.

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Definitions:

Intermediate Product

A product that is a result of a process but is also used as an input in the production of a final or finished product.

Differential Revenue

The amount of increase or decrease in revenue expected from a particular course of action as compared with an alternative.

Differential Cost

The amount of increase or decrease in cost expected from a particular course of action compared with an alternative.

Variable Costs

Costs that vary in proportion to changes in the activity base.