Bright Eyes Downtown Diner received a bill of $600 from the Jronand Wine Advertising Agency. The owner, A. A. Bondy, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

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The postponement of payment results in an increase in Accounts Payable (liability) as the diner owes money, and a decrease in Retained Earnings as the expense reduces net income.

Bright Eyes Downtown Diner Received a Bill of $600 from the Jronand