Use this information to answer the following question. Here is the balance sheet for Abbot Box Company:
If the balance in the Cash account were used to pay part of Accounts Payable, then total liabilities and owner's equity would
A) decrease by $8,000.
B) increase by $8,000.
C) increase by $16,000.
D) decrease by $16,000.

Question

Use this information to answer the following question. Here is the balance sheet for Abbot Box Company:
 If the balance in the Cash account were used to pay part of Accounts Payable, then total liabilities and owner's equity would
A) decrease by $8,000. 
B) increase by $8,000. 
C) increase by $16,000. 
D) decrease by $16,000.

Quizplus · Accepted Answer

If the balance in the Cash account were used to pay part of Accounts Payable, then both the Cash account and the Accounts Payable account would decrease by $8,000. Therefore, the total liabilities and owner's equity would decrease by $8,000.

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