Question

If Mr. Ajasin paid his creditors N5000 out of N20 000 owed, what would be the effect of this transaction on the accounting equation?

Accepted Answer

A decraese in the total asssets by N5000

Answer

An incraese in the total liabilities and owners' equity by by N15 000

Answer

An increase in the total assets by N15 000

Answer

A decrease in owners' equuity by N5000

If Mr. Ajasin paid his creditors N5000 out of N20 000 owed, what would be the effect of this transaction on the accounting equation?