5. Which of the following statements is correct?[table]
| | Assets | Liabilities a) | We paid a creditor by cheque | - Bank | - Trade payables b) | A debtor paid us £90 in cash | + Cash | + Trade receivables c) | J. Hall lends us £500 by cheque | + Bank | - Loan from J. Hall d) | Bought goods on credit | + Inventory | + Capital
[/table]

Question

BlackTom AI · Accepted Answer

Paying a creditor by cheque decreases the bank balance (asset) and decreases trade payables (liability), so option (a) is correct.

1) Relevant knowledge points and concepts
- Basic accounting equation: Assets = Liabilities + Equity. Every transaction affects at least two accounts, keeping the equation balanced.
- Debit/credit rules (in double-entry): assets increase with debits and decrease with credits; liabilities increase with credits and decrease with debits.
- Paying a creditor: you remove the obligation (reduce liability) and reduce your cash/bank (reduce asset).

2) Step-by-step reasoning (option a)
- Transaction: We pay a creditor by cheque.
- Effect on accounts: Bank (asset) decreases; Trade payables (liability) decreases.
- Double-entry: Debit Trade Payables (liability decreases) and Credit Bank (asset decreases).
- Intermediate bookkeeping steps: Before: Assets = A, Liabilities = L. After: Assets = A - bank_payment; Liabilities = L - creditor_paid. The accounting equation remains balanced because both sides fall by the same amount.

3) For completeness, show debits/credits
- Journal entry: Debit Trade Payables XXX; Credit Bank XXX.
- Asset change: Bank ↓ (credit)
- Liability change: Trade Payables ↓ (debit)

4) Why (a) is correct
- It correctly identifies the decrease in an asset (bank) and the corresponding decrease in a liability (trade payables) when a creditor is paid by cheque.

5) Why the other options are incorrect
- (b) A debtor paying £90 in cash: should be +Cash and −Trade Receivables (you collect cash and remove receivable). Option (b) shows +Trade Receivables, which is wrong.
- (c) J. Hall lends us £500 by cheque: should be +Bank (asset) and +Loan from J. Hall (liability). Option (c) shows −Loan, which is the opposite.
- (d) Bought goods on credit: should be +Inventory (asset) and +Trade Payables (liability). Option (d) shows +Capital instead of +Trade Payables, so it’s wrong.

Conclusion: The correct choice is a, which matches the provided answer.

类似问题

When a check is cashed, the check writer's bank assets and liabilities.

The equity of Autumn Company is $130,000 and the total liabilities are $40,000. The total assets are ________.

2. Which of the following is not an asset?

3. The speaker seems most disappointed about:

2. A typical flying car costs about Answer Question 2[input] times more than a regular car.

Listen to this mini-lecture about flying cars, and answer the following questions. Questions 1 and 2. Complete the following sentences with a NUMBER only. Do NOT write words.1. Car batteries would need to provide Answer Question 1[input] times more energy for a flying car.

Choose A, B, C or D as the best answer.30. The author’s main argument is that __________.

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单