Photometer Company paid off $30,000 of its accounts payable in cash. What would

Question

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase
B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect
C. Assets, $30,000 decrease: liabilities, $30,000 increase; equity, no effect
D. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase
E. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease

Explanation / Answer

C. Assets, $30,000 decrease: liabilities, $30,000 increase; equity, no effect

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