On September 30, ABC paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation? Multiple Choice Expenses decreased, liabilities decreased, and assets decreased.

On September 30, ABC paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation? Multiple Choice Expenses decreased, liabilities decreased, and assets decreased.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 2EB: CPK ** Associates is a mid-size legal firm, specializing in closings and real estate law in the...

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Question

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On September 30, ABC paid employee salaries of $7,000, including $1,000 it owed to its employees last month. What are
the effects of this transaction on the accounting equation?
Multiple Choice
Expenses decreased, liabilities decreased, and assets decreased.
Expenses increased, liabilities increased, and assets increased.

Assets decreased, expenses decreased, and liabilities increased
Assets decreased, liabilities decreased, and expenses increased

Expert Solution

Step 1

Introduction:-

The following balance sheet (Accounting) equation used as follows under:-

Assets = Liabilities + Owners equity

In this problem,

ABC paid employee salaries of $7,000, including $1,000 it owed to its employees last month.

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