Delta 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 Delta's statements?
A) Paid a cash dividend
B) Incurred a cash expense
C) Borrowed money from a bank
D) Earned cash revenue

Question

Delta 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 Delta's statements?
A) Paid a cash dividend 
B) Incurred a cash expense 
C) Borrowed money from a bank 
D) Earned cash revenue

Quizplus · Accepted Answer

The decrease in cash and increase in expenses indicates that Delta incurred a cash expense. None of the other choices would result in this specific combination of effects on the financial statements.

Delta Company Experienced an Accounting Event That Affected Its Financial