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

Incurring a cash expense would decrease assets (cash) and decrease equity (retained earnings). It would increase expenses and decrease net income, and would be reported as a cash outflow for operating activities on the statement of cash flows.

Delta Company Experienced an Accounting Event That Affected Its Financial