Treadwell Company borrowed $32,000 of cash from a local bank. Which of the following choices accurately reflects how this event affects the company's financial statements?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Treadwell Company borrowed $32,000 of cash from a local bank. Which of the following choices accurately 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

Borrowing cash increases assets (cash) and increases liabilities (notes payable). It does not affect the income statement, but is reported as a cash inflow for financing activities on the statement of cash flows.

Treadwell Company Borrowed $32,000 of Cash from a Local Bank