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Petkus Company Paid Perkins Products, a Creditor, on Account, $7,500

Question 37

Multiple Choice

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

A) Assets increase $7,500; liabilities, no effect; owner's equity increases $7,500.
B) Assets decrease $7,500; liabilities, no effect; owner's equity decreases $7,500.
C) Assets increase $7,500; liabilities decrease $7,500; owner's equity, no effect.
D) Assets decrease $7,500; liabilities decrease $7,500; owner's equity, no effect.
E) Assets decrease $7,500; liabilities increase $7,500; owner's equity, no effect.

Correct Answer: