Saddleback Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?
A) Assets, $30,000 decrease; liabilities, $30,000 increase.
B) Assets, $30,000 decrease; equity $30,000 decrease.
C) Assets, $30,000 increase; equity, $30,000 increase.
D) Liabilities, $30,000 decrease; equity, $30,000 increase.
E) Assets, $30,000 decrease; liabilities, $30,000 decrease.

Question

Quizplus · Accepted Answer

Paying off accounts payable in cash decreases both assets (cash) and liabilities (accounts payable) by $30,000.

Saddleback Company Paid Off $30,000 of Its Accounts Payable in Cash