Jackson Electric Services incurred $800 as a repair expense and paid for it in cash. This transaction will ________.

Question

Quizplus · Accepted Answer

Paying for a repair expense in cash decreases the company's cash asset (an asset decrease) and also decreases stockholders' equity because expenses reduce net income, which in turn reduces retained earnings, a component of stockholders' equity. There is no increase in assets or liabilities, and liabilities are not directly affected by this transaction.

Jackson Electric Services Incurred $800 as a Repair Expense and Paid