Ask Experts Questions for FREE Help !
Ask
    gadsdengal's Avatar
    gadsdengal Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Jun 30, 2008, 04:01 PM
    Transaction effects
    A business paid creditors on account. What is the effect on this transaction on assets and liabilities?
    plonak's Avatar
    plonak Posts: 742, Reputation: 117
    Senior Member
    		  
    #2

    Jun 30, 2008, 04:37 PM
    Ok not quite sure if your questions is asking what happens when they pay their debts? Or if they incurr debts, so I will give you an answer for both:

    If they incurr debt.. you <Dr.> cash (asset) and <Cr> Liability. So it increases assets and increases liabilties..

    If they pay off the debt you're taking the liability off the books which is decreasing liabilities, and you're paying it off with cash so that decreases assets.. <Dr.>Liability. <Cr>. Asset..
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Journalize Transaction [ 1 Answers ]

Sold inventory on credit terms 2/15, n/45, $3,900 (cost, $1,800).

Transaction [ 2 Answers ]

Could someone please help me out? I need to record a transaction for receiving $70,000 for the sale of 50,000 shares of $1 par value common stock. Would I record this as a debit to cash for the 70,000, then a credit to common stock for 50,000 and a 20,000 credit to premium on common stock? ...

Transaction tracing [ 2 Answers ]

Hello, I hope that someone can help me. I own a business and I have been getting calls from people that say that I ( the company ) is taking money out of their accts and I don't have means to do that. These people are all different states . How do I trace this action and who do I go to to do...

Recording transaction [ 1 Answers ]

**PROBLEM I** 1. Each year MaryK holds an annual “Puppy Paradise Lua” (PP-Lua) at the town’s only Pet Restaurant – MaryK’s House. This includes dinner and spa treatment for the puppies and their owners. The PP-Lua is catered by Dr. Miller. Dr. Miller will charge all food and beverage costs...

View more questions Search