Llewelyn Company paid the amount due on a purchase of merchandise on account.Llewelyn uses the perpetual inventory system.Which of the following reflects the effect of the payment on the financial statements?

Question

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Payment of the amount due on account decreases assets (cash) and liabilities (accounts payable). It does not affect net income, but will be reported as a cash outflow for operating activities.

Llewelyn Company Paid the Amount Due on a Purchase of Merchandise