A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to a.decrease an asset, decrease a liability b.increase an asset, increase owner's equity c.increase an asset, decrease another asset d.increase an asset, increase a liabilit

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is