On May 31,a retail firm pays rent of $2,400 for the month of May.When this transaction is recorded in the cash payments journal,________.

Question

Quizplus · Accepted Answer

When the rent payment is recorded in the cash payments journal, the asset cash will decrease by $2,400, which will result in a decrease in equity by the same amount. Therefore, the correct choice is C, as both assets and equity will decrease by $2,400. There will be no impact on liabilities as rent is not a liability in this case.

On May 31,a Retail Firm Pays Rent of $2,400 for the Month