A transaction has been recorded in the T-accounts of Vernon Company as follows:

Which of the following reflects how this event affects the company's financial statements?

A)Option A
B)Option B
C)Option C
D)Option D

Question

A transaction has been recorded in the T-accounts of Vernon Company as follows:

Which of the following reflects how this event affects the company's financial statements?

A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The debit to the Land T-account increases total assets and the credit to the Cash T-account decreases total assets.The increase is offset by the decrease and total assets do not change as a result of this transaction.The income statement is not affected,and the transaction is reported as a cash outflow for investing activities.

A Transaction Has Been Recorded in the T-Accounts of Vernon