Chico 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 Chico's financial statements?
A)Issued common stock
B)Earned cash revenue
C)Borrowed money from a bank
D)Paid a cash dividend

Question

Chico 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 Chico's financial statements?
A)Issued common stock 
B)Earned cash revenue 
C)Borrowed money from a bank 
D)Paid a cash dividend

Quizplus · Accepted Answer

Issuing common stock would increase assets (cash)and increase equity (common stock).It would not affect net income,but would be reported as a cash inflow from financing activities on the statement of cash flows.

Chico Company Experienced an Accounting Event That Affected Its Financial