If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?
a. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000.
b. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000.
c. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change.
d. There would be no effect on the accounts because the accounts are affected by the same amount.
e. None of these.
Answer: C
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