Q55
Payment of expenses will ______ the assets
A.
Increase
B.
Reduce
AnswerC.
Apportion
D.
Overstate
Answer: Option B
Solution
Answer: Option B
Solution:
Payment of expenses will reduce the assets. When an expense is recorded at the same time it is paid for with cash, the cash (asset) account declines, while the amount of the expense reduces the retained earnings account.