Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 26 - No. 8)
What is the effect on the balance sheet when a company makes a cash payment to its supplier?
Assets increase, liabilities increase.
Assets decrease, liabilities decrease.
Assets increase, equity increases.
Assets decrease, equity decreases.
Explanation
Cash decreases and accounts payable (a liability) decreases.
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