Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 5 - No. 23)
What is the impact of paying for a new item by cheque?
The assets and liabilities are both decreased.
The assets are increased and the liabilities are increased.
The liabilities are decreased and the assets are increased.
The assets are decreased and the liabilities are unchanged.
Explanation
Paying by cheque reduces the cash asset but does not change the liabilities.
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