Verne Company recorded a business event in T-accounts 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

Verne Company recorded a business event in T-accounts 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 land increases assets and the credit to cash decreases assets, resulting in no net effect on assets. The income statement is not affected, and the transaction is reported as a cash outflow for investing activities.

Verne Company Recorded a Business Event in T-Accounts as Follows