If a company paid $38,000 of its accounts payable in cash,what was the effect on the accounting equation?
A)Assets would decrease $38,000,liabilities would decrease $38,000,and equity would decrease $38,000.
B)Assets would decrease $38,000,liabilities would decrease $38,000,and equity would increase $38,000.
C)Assets would decrease $38,000,liabilities would decrease $38,000,and equity remains unchanged.
D)There would be no effect on the accounts because the accounts are affected by the same amount.
E)Assets would increase $38,000 and liabilities would decrease $38,000.

Question

Quizplus · Accepted Answer

Paying off accounts payable involves decreasing both the liability (accounts payable) and the asset (cash), but there is no effect on equity. Therefore, the accounting equation remains in balance.

If a Company Paid $38,000 of Its Accounts Payable in Cash,what