Accrual Accounting vs. Cash Basis Accounting Video Lessons

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Problem: BBQ Grill received a bill of $400 from the Yumm Advertising Agency. The owner, Wayne Chang, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is a. a decrease in Cash and an increase in Accounts Payable. b. a decrease in Cash and an increase in W. Chang, Capital. c. an increase in Accounts Payable and a decrease in W. Chang, Capital. d. a decrease in Accounts Payable and an increase in W. Chang, Capital.

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Problem Details

BBQ Grill received a bill of $400 from the Yumm Advertising Agency. The owner, Wayne Chang, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

a. a decrease in Cash and an increase in Accounts Payable.

b. a decrease in Cash and an increase in W. Chang, Capital.

c. an increase in Accounts Payable and a decrease in W. Chang, Capital.

d. a decrease in Accounts Payable and an increase in W. Chang, Capital.

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Our tutors rated the difficulty ofBBQ Grill received a bill of $400 from the Yumm Advertising ...as low difficulty.