BNC Company earns revenues and as a result collects cash.Which of the following financial statement elements are increased?

Question

Quizplus · Accepted Answer

When BNC Company earns revenues and collects cash, two financial statement elements are increased. Cash increases because it is being collected, and stockholders' equity also increases because revenues earned by the company increase retained earnings, which is a component of stockholders' equity. Therefore, the correct answer is D: Cash and stockholders' equity.

BNC Company Earns Revenues and as a Result Collects Cash