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Financial Accounting

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Effect of a Vendor Payment on Financial Statements

FINACT-OUKXKN

On July 12, Lucky Tee, a custom apparel manufacturer, paid $300 owed to vendors for prior purchases of blank t-shirts (inventory) made on account. This transaction affected the apparel company's financial statement elements as follows:

A

Assets and liabilities increased.

B

Assets and liabilities decreased.

C

Assets and owner’s equity increased.

D

Assets and owner's equity decreased.

E

Liabilities decreased and owner's equity increased.

F

Lucky Tee's financial statement elements were not impacted by this transaction.