Question
74 of
80
Question Palette
Payment of a liability results in:
A
Increase in total assets
B
Decrease in total assets
C
No change in total assets
Correct Option:
B
Explanation
Suppose a business owes ₹10,000 and pays it.
- Liability decreases by ₹10,000.
- Cash, an asset, also decreases by ₹10,000.
Therefore, total assets decrease.
