Adkins 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 ABC's statements?
A) Issued common stock.
B) Earned cash revenue.
C) Earned revenue on account.
D) Collected cash from accounts receivable.

Question

Adkins 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 ABC's statements?
A) Issued common stock. 
B) Earned cash revenue. 
C) Earned revenue on account. 
D) Collected cash from accounts receivable.

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.

Adkins Company Experienced an Accounting Event That Affected Its Financial