Reference no: EM132728336

Problem 1: A sole proprietor recorded the payment of an account payable to an office supplies store. Recording the transaction will:

Option 1: Increase an asset, increase owner's equity
Option 2: Decrease an asset, decrease owner's equity
Option 3: Decrease an asset, decrease a liability

Problem 2: Which of the following is a formal written promise to pay a definite sum of money on demand or a fixed determinable future date?

Option 1: prepaid insurance policy
Option 2: noted payable
Option 3: Accounts payable