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 statements?

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 statements?

Quizplus · Accepted Answer

Earning revenue on account increases assets (accounts receivable) and increases revenue, which increases net income and equity (retained earnings). It does not affect cash flows.

Addison Company Experienced an Accounting Event That Affected Its Financial