Question

A company paid an old bill from a previous month for $300 cash. The effect of this transaction in the basic accounting equation is *

A decrease in Cash and an increase in Accounts Payable
A decrease in Cash and an increase in Owner’s Capital
An increase in Accounts Payable and a decrease in Owner’s Capital
None of the above

Answer 1

None of the above

Step-by-step explanation:

Given the situation described above in the question and considering the available options, the right answer to

-The effect of this transaction in the basic accounting equation is that "the account payable decreases and the cash increases"

This answer is not part of the available option. Hence, the correct answer is "None of the above"