Reynolds 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 Reynolds' accounting equation?
A)Paid a cash dividend.
B)Earned cash revenue.
C)Borrowed money from a bank.
D)The information provided does not represent a completed event.

Question

Reynolds 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 Reynolds' accounting equation?
A)Paid a cash dividend. 
B)Earned cash revenue. 
C)Borrowed money from a bank. 
D)The information provided does not represent a completed event.

Quizplus · Accepted Answer

The increase in cash ($6,000) and the corresponding increase in retained earnings ($6,000) suggest that Reynolds earned cash revenue.

Reynolds Company Experienced an Accounting Event That Affected Its Financial