A company's first transaction in 2016 was to pay $9000 cash for wages earned and recognised as an expense in 2015.Which of the following changes took place as a consequence of that transaction?

Question

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Liabilities decreased by $9000 because the payment of wages that were earned and recognized as an expense in the previous year (2015) would reduce the company's liabilities (wages payable) and also decrease its cash assets by the same amount.

A Company's First Transaction in 2016 Was to Pay $9000