Jackson Company paid $500 cash for salary expenses. Which of the following accurately reflects how this event affects the company's horizontal financial statements model?

Question

Quizplus · Accepted Answer

Option B accurately reflects the impact of the $500 cash payment for salary expenses on the company's horizontal financial statements. It shows a decrease in cash (from $10,000 to $9,500) and an increase in salary expenses (from $0 to $500), resulting in a decrease to the company's total equity (from $10,000 to $9,500). Options A, C, and D do not accurately reflect the impact of the transaction. Option A only shows a decrease in cash, but does not reflect the increase in salary expenses or the impact on total equity. Option C shows a decrease in total assets, but does not reflect the increase in salary expenses or the impact on total equity. Option D shows an increase in total expenses, but does not reflect the decrease in cash or the impact on total equity.

Jackson Company Paid $500 Cash for Salary Expenses