Question

When revenue expenses are paid in cash?
A) increase in assets – increase in liability
(B) decrease in assets – decrease in capital
(C) increase in assets – increase in capital
(D) decrease in assets – decrease in liability

Answer 1

D) decrease in assets- decrease in liability..

hope this helps you

Answer 2

Answer:

An accounting transaction is a business activity or event that causes a measurable change in the accounting equation. An exchange of cash for merchandise is a transaction. Merely placing an order for goods is not a recordable transaction because no exchange has taken place. In the coming sections, you will learn more about the different kinds of financial statements accountants generate for businesses.

In the previous section we described specific types of accounts that business activities fall into, namely:

Assets (what it owns)

Liabilities (what it owes to others)

Equity (the difference between assets and liabilities or what it owes to the owners)

These are the building blocks of the basic accounting equation. The accounting equation is:

ASSETS = LIABILITIES

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