Brown Inc. has just paid its monthly bill,what balance sheet and income statement accounts will this transaction affect?
To determine which balance sheet and income statement accounts will be affected by Brown Inc. paying its monthly bill, we need to understand the nature of the transaction and how it impacts the company's financial position.
When Brown Inc. pays its monthly bill, it usually refers to settling accounts payable, which is a liability on the balance sheet representing the amount owed by the company to its creditors or vendors. As a result, the following accounts will be affected:
1. Balance Sheet Accounts:
- Accounts Payable: The amount owed on the balance sheet will decrease as the company makes the payment, reducing its liability.
- Cash or Bank Account: The cash or bank account balance will decrease as the company pays the bill.
2. Income Statement Account:
- None of the income statement accounts are directly impacted by the payment of bills. The payment does not directly affect revenues, expenses, or net income.
It's important to note that this is a general answer, and the specific accounts impacted may vary depending on the company's accounting systems and practices.