Venus,Inc.paid $12,000 on accounts payable.How does this transaction affect the accounting equation of Venus?

Question

Quizplus · Accepted Answer

This transaction decreases the accounts payable liability (part of current liabilities) by $12,000, resulting in a decrease in total liabilities. As the payment was made using cash, the assets also decrease by $12,000. Hence, the accounting equation is balanced with a decrease in both assets and liabilities, leading to no change in equity. Therefore, option B is the correct answer.

Venus,IncPaid $12,000 on Accounts Payable