Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 45 - No. 42)
What is the effect on the accounting equation when an expense is incurred and paid?
Assets increase, and liabilities increase.
Assets decrease, and liabilities decrease.
Assets increase, and equity decreases.
Assets decrease, and equity decreases.
Explanation
An expense reduces the company's profit. This decrease reduces equity.
Comments (0)
