If a Company Paid $38,000 of Its Accounts Payable in Cash

Multiple Choice

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.