Question

question 7 (5 points)
a business paid $7,000 to a creditor in payment of an amount owed. the effect of the transaction on the accounting equation was to
increase an asset, decrease another asset
decrease an asset, decrease a liability
increase an asset, increase a liability
increase an asset, increase stockholders equity
question 8 (5 points)
which of the following is not a role of accounting in business?
to provide reports to users about the economic activities and conditions of a business
to personally guarantee loans of the business
to provide information to external users to determine the economic performance and condition of the business
to assess the various informational needs of users and design its accounting system to meet those needs

Explanation:

For Question 7: When a business pays a creditor, it uses cash (an asset), decreasing the asset. At the same time, the amount owed (a liability) also decreases.
For Question 8: Accounting provides financial - related information and reporting, not personal loan guarantees.

Answer:

Question 7: B. decrease an asset, decrease a liability
Question 8: B. to personally guarantee loans of the business