Home accounting How Does Paying A Liability In Cash Affect The Accounting Equation?

# How Does Paying A Liability In Cash Affect The Accounting Equation?

How Does Paying A Liability In Cash Affect The Accounting Equation?. How does paying this liability affect the accounting equation of the business? 26 january 2022 by lets tokmak.

Since furniture is being bought by paying cash, the value of furniture has increased from zero to 25,000. Liability a/c (debit) to cash a/c (credit) debiting the liability will reduce liability and crediting cash will reduce assets. How does paying this liability affect the accounting equation of the business?

## How Does Paying This Liability Affect The Accounting Equation?

A business settles a liability by making a payment with cash. Decrease an asset, decrease a liability b. It would affect net income.

## Increase An Asset, Increase Owner's Equity D.

26 january 2022 by lets tokmak. How does paying this liability affect the accounting equation? (v) rent paid in advance ₹ 150.

## (I) Started Business With Cash ₹ 50,000.

If a payment of liability made in cash, how does it affect the accounting equation? If operations for an accounting period resulted in fees for cash of \$25,000, fees on account of \$30,000, and expenses. Q.3 show the effect of the following transactions on the accounting equation:

## Assets, Liabilities And Owners’ Equity Are The Three Components Of The Accounting Equation That Make Up A Company’s Balance Sheet.

How does paying a liability in cash affect the accounting equation? As of the end of its accounting period,december 31, year 1, great plains company has assets of \$940,000 and liabilities of \$300,000. Liability a/c (debit) to cash a/c (credit) debiting the liability will reduce liability and crediting cash will reduce assets.

## A Business Settles A Liability By Making A Payment With Cash.

(iv) interest due but not paid ₹ 100. Hence, the correct option is d. Liabilities decrease o assets increase;