Addison Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Addison's financial statements?
A) Issued common stock
B) Earned revenue on account
C) Earned cash revenue
D) Collected cash from accounts receivable

Question

Addison Company experienced an accounting event that affected its financial statements as indicated below:  Which of the following accounting events could have caused these effects on Addison's financial statements?
A) Issued common stock 
B) Earned revenue on account 
C) Earned cash revenue 
D) Collected cash from accounts receivable

Quizplus · Accepted Answer

The increase in accounts receivable and revenue indicate that Addison earned revenue on account, which is option B. The other options do not explain the increase in accounts receivable and revenue.

Addison Company Experienced an Accounting Event That Affected Its Financial