Saddleback Company paid off $35,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Question

Answer

Liabilities decrease $35,000; equity increases $35,000.

Answer

Assets decrease $35,000; equity decreases $35,000.

Answer

Assets decrease $35,000; liabilities decrease $35,000.

Answer

Assets increase $35,000; equity increases $35,000.

Answer

Assets decrease $35,000; liabilities increase $35,000.

Crowdly