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If an expense is paid with cash assets will decrease. retained earnings will increase. liabilities will increase. expenses will decrease.

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Answer:

If an expense is paid with cash the assets will decrease.

Explanation:

  • As long as cash is termed as a current asset, its flowing out of the business would be considered as a decrease in the assets.
  • Though it is a conventional practice to pay for expenses in cash, it has to be taken into consideration that the assets of the business are decreasing with such payments done.
  • But as cash is a highly fluid asset, its inflow and outflow do not bother the business much.

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