Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation .

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Do fast and step by step calculation with explanation for this general accounting question

Need your help with Question

A one-year, $22,400, 10% note is signed on May 1. If the note is repaid on November 1 of the same year, how much interest expense is incurred?

Answer 2

Question

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.

Answer 6

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.

Answer 7

Chapter 9, Problem 1Q

To determine

Find the transaction type of “cash payment to creditors” and explain the way it effects the accounting equation.

Answer 8

Expert Solution & Answer

Explanation of Solution

Asset use transactions are the transactions that results in a decrease of both the asset and claims on assets.

It is an assets use transaction. Cash payment to creditors’ results in cash outflow which decreases the assets (cash) balance and it also decreases the liabilities (accounts payable) balance.

Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below.

Assets = Liabilities + Stockholders' Equity

Assets use transaction reduces both the sides of the accounting equation. That means it decreases the assets (cash) balance as well as it decreases the liabilities (accounts payable) balance.