Payment of expenses will ______ the assets
A. Increase
B. Reduce
C. Apportion
D. Overstate
Answer: Option B
Solution (By Examveda Team)
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.This Question Belongs to Commerce >> Accounting
Payment of expenses will be made through either bank or cash. Bank & Cash is assets. And balance of cash and bank will be reduced.
can anyone explain the logic behind it