Mark paid $300 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would:
A) increase both Assets and Liabilities.
B) increase Assets and decrease Liabilities.
C) decrease both Assets and Liabilities.
D) decrease Assets and increase Liabilities.

Question

Quizplus · Accepted Answer

Paying cash to reduce an amount owed decreases both the cash asset (an asset decrease) and the amount of the liability (a liability decrease).

Mark Paid $300 Cash to Partially Reduce the Amount Owed