Answer :
Liabilities will decrease and equity will increase.
What do you understand by Liabilities?
A liability is a financial debt that an individual or organization owes. Liabilities are finally paid through the transfer of economic advantages like money, goods, or services.
Liabilities have three major characteristics: they are a type of borrowing; they are a current obligation that binds an entity; and they will diminish assets upon settlement.
Liabilities include things like -
bank debt
mortgage debt
Payment due to suppliers (accounts payable)
unpaid wages.
tax debt.
Liabilities are initially valued and documented using the cost principle, just like assets. In other words, the liability is calculated and recorded at the asset's or service's current market value at the time it is incurred.
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