what-is-the-effect-of-creating-a-liability-instead-of-paying-cash-in-an-asset-ex

Question

What is the effect of creating a liability instead of paying cash in an asset exchange transaction?

Accepted Answer

It is recorded as a credit to liabilities.

Answer

It is recorded as a credit to cash.

Answer

It is recorded as a debit to cash.

Answer

It is recorded as a debit to liabilities.