The payment of a liability:
A) decreases assets and stockholders' equity.
B) increases assets and decreases liabilities.
C) decreases assets and increases liabilities.
D) decreases assets and decreases liabilities.

Question

Quizplus · Accepted Answer

The payment of a liability decreases assets because cash or another asset is used to pay the liability. It also decreases liabilities because the obligation is being fulfilled, reducing the amount owed.

The Payment of a Liability