What is the effect on the basic accounting equation of the cash payment of accrued interest payable previously accrued?
A)Increase assets,increase liabilities
B)Decrease assets,decrease liabilities
C)Decrease assets,increase liabilities
D)Increase liabilities,decrease stockholders' equity
E)Decrease liabilities,increase stockholders' equity

Question

Quizplus · Accepted Answer

Paying off accrued interest payable with cash decreases both assets (cash) and liabilities (interest payable), keeping the accounting equation balanced.

What Is the Effect on the Basic Accounting Equation of the Cash