Stewart Company pays its supplier $3,800 for supplies purchased three weeks earlier.Required:Check all that apply.An asset account increases. An asset account decreases. A liability account increases. A liability account decreases. Capital Stock increases. Capital Stock decreases. Retained Earnings increase. Retained Earnings decrease.

Name: Stewart Company pays its supplier $3,800 for supplies purchased three
Uploaded: 2024-03-04T10:43:15.000Z
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Description: Stewart Company pays its supplier $3,800 for supplies purchased three weeks earlier.Required:Check all that apply.An asset account increases. An asset account decreases. A liability account increases. A liability account decreases. Capital Stock

The question is based on the concept of Business Transaction Analysis.When the supplies were bought the effect was: Asset-Supplies increased by $3,800 and Liability-Accounts payable increased by $3,800 When the payment is made today the effect would be: Asset-Cash decreases by $3,800 Liability-Accounts payable decreases by $3,800 Further, the total assets and the total liabilities and equity would both decreased by $3,800. Therefore based on the above we can conclude that the following shall apply: An asset account decreases. A liability account decreases.

Answered: Stewart Company pays its supplier…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Stewart Company pays its supplier $3,800 for supplies purchased three weeks earlier.

Required:

Check all that apply.

An asset account increases.		An asset account decreases.
A liability account increases.		A liability account decreases.
Capital Stock increases.		Capital Stock decreases.
Retained Earnings increase.		Retained Earnings decrease.

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