cash accounting accrual accounting cost accounting A business pays off a note pa
ID: 2426033 • Letter: C
Question
cash accounting accrual accounting cost accounting A business pays off a note payable. What effect does this have on the accounting equation? Assets go up, Liabilities go down, and Stockholders' Equity remains the same. Assets go down, Liabilities remain the same, and Stockholders' Equity goes up. Assets go up, Liabilities remain the same, and Stockholders' Equity goes up. Assets go down, Liabilities go down, and Stockholders' Equity remains the same. A business purchases a computer for cash. What effect does this have on the accounting equation? Assets go up and Liabilities go down. Stockholders' Equity and Assets go up. Stockholders' Equity and Liabilities go up. There is no change in Total Assets.Explanation / Answer
4).
Notes payable are sources of resources. They are written promises to pay specified amounts, on specific dates, to the owners of the notes. Usually Notes are payable with interest. so it is a kind of a liabilty.
When a business pays off a note payable. Its liability decreases.
pays off a note payable results in outflow of resources (money). So Asset also goes down.
Stackholders Equity remains the same.
Correct option is D.
5).
Business purchase a computer for cash.
There is a outflow of Cash. Cash is also an asset.
There is a inflow of a compuer . Computer is also an asset.
Asset comes in & Asset goes out. So there is no change in Total Assets.
Correct option is D
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