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 customers in partial settlement of its 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 customers in partial settlement of its accounts receivable.

Quizplus · Accepted Answer

The increase in accounts receivable and revenue on the balance sheet and income statement, respectively, suggest that Addison earned revenue on account. None of the other options would result in these specific effects on the financial statements.

Addison Company Experienced an Accounting Event That Affected Its Financial