Question

Paid the liability for interest payable accrued at the end of the last accounting period."

This entry decreases assets, decreases current liabilities, and affects the operating activities section of the statement of cash flow as a use of cash due to the decrease of current liabilities.

When they say "has an affect", is the affect increase or decrease?

Answer 1

When a liability for interest payable accrued at the end of the last accounting period is paid, it decreases assets, decreases current liabilities, and affects the operating activities section of the statement of cash flow as a use of cash due to the decrease in current liabilities.

Step-by-step explanation:

When a liability for interest payable accrued at the end of the last accounting period is paid, it decreases assets, decreases current liabilities, and affects the operating activities section of the statement of cash flow as a use of cash due to the decrease in current liabilities. When they say 'has an effect', the effect is a decrease. This means that the payment of the liability reduces the financial resources of the company and its total amount of short-term debts.