A payment of N150 to a credit

Assessment: WAEC SSCE - Financial Accounting - 1996 (Objective) Subject: Financial Accounting

Question 1 Report

A payment of N150 to a credit
Answer Details
A payment of N150 to a credit would result in a reduction of assets and liabilities. When a payment is made to a creditor, it results in a decrease in the bank balance (reduction in assets) and also reduces the amount owed to the creditor (reduction in liabilities). So, it affects both the asset and liability side of the balance sheet. Therefore, the correct answer is "a reduction in assets and liabilities".
Read lesson note on Cashbook (JAMB)
Read lesson note on Nature And Significance Of Accounting (JAMB)
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