What is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it is received each month? Total assets Stockholders' equity A. No effect Decrease B. No effect No effect C. Decrease No effect D. Decrease Decrease

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Jade

Business

2 May, 08:04

What is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it is received each month? Total assets Stockholders' equity A. No effect Decrease B. No effect No effect C. Decrease No effect D. Decrease Decrease

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Omari Logan · Answer 1

Option C) Decrease in Total Assets, and No Effect on Equity

Explanation:

Telephone bill it's a Current Liability, if you decide to pay it as soon as you receive it you have to use Cash which is part of your Current Asset, so the impact it's a decreased in your Current Assets through the Cash component.

This movement has no impact in the Sotckholder Equity.