Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 20 - No. 29)
When a customer pays a bill with a cheque, what is the immediate effect on the accounting equation?
Assets increase, liabilities increase.
Assets decrease, owner's equity increases.
Assets increase, owner's equity decreases.
Assets increase, owner's equity increases.
Explanation
A check payment increases assets (cash/bank) and increases owner's equity via increased revenue from sales.
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