Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 24 - No. 7)
What is the impact on the accounting equation when a company pays its rent with cash?
Assets increase, liabilities increase.
Assets decrease, liabilities increase.
Assets decrease, equity decreases.
Assets increase, equity increases.
Explanation
Cash (an asset) decreases and rent expense (reducing equity) increases.
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