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 the elements of Reynolds' statements?
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 the elements of Reynolds' statements?
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

Earning cash revenue must have been the event that affected the financial statements as indicated because it increased revenue and net income on the income statement and was reported as a cash inflow for operating activities on the statement of cash flows.

Reynolds Company Experienced an Accounting Event That Affected Its Financial