Question

Decrease in one liability may lead to * a) Decrease in an assets b) Increase in another liability. c) Either a) or b). d) None of these.

Answer 1

either a and b

Explanation:

beacuse it creates decrease in asset

but as well as increase a liability

Answer 2

Option C either a or b is the correct answer

Decrease in one liability causes either increase in another liability or decrease in an asset.

Liability is something which needs to be paid or it is a part of someones other asset which we own and have to be repaid when required.

For the payment of liability we will  use our asset like cash or bills recievable so when we will pay our liability one of our asset will reduce.

For the payment of liability there can be an increase in other liability as we must have taken loan for the payment of one, so this will cause increase in other liability.