Critter Sitters paid $1,000 cash for insurance. How will this transaction impact the accounting equation?

Assets decrease and assets increase.
Assets increase and liabilities decrease.
Assets increase and owner’s equity decreases.
Liabilities decrease and owner’s equity decreases.

Question

Critter Sitters paid $1,000 cash for insurance. How will this transaction impact the accounting equation?

Assets decrease and assets increase.
 Assets increase and liabilities decrease.
 Assets increase and owner’s equity decreases.
 Liabilities decrease and owner’s equity decreases.

Bubbleshimmer15 · Answer

I go with A.) Assets decrease and assets increase.
The Reason why I say that because If they are paying a year of insurance it could reduce the companys cash there working for so the assets would decrease in fact. And In exchange for the other cash the company also would receive insurance for the coverage that will would benefits for the Nexts more than 11 monthes

kekeman · Answer

Yup you were right thanks so much