Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?
A)Assets,$30,000 increase;equity,$30,000 increase.
B)Assets,$30,000 decrease;liabilities,$30,000 decrease.
C)Assets,$30,000 decrease;liabilities,$30,000 increase.
D)Liabilities,$30,000 decrease;equity,$30,000 increase.
E)Assets,$30,000 decrease;equity $30,000 decreasE.Assets = Liabilities + Owner's Equity

Question

Quizplus · Accepted Answer

Paying off accounts payable decreases the company's liabilities (accounts payable) by $30,000 as the company no longer owes that amount. The payment was made in cash, so the company's assets (cash) also decrease by $30,000. Therefore, the accounting equation remains balanced.

Saddleback Company Paid Off $30,000 of Its Accounts Payable in Cash.What