A transaction has been recorded in the T-accounts of Hough Company 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

A transaction has been recorded in the T-accounts of Hough Company 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 Cash and credit to Notes Payable indicates that cash,an asset,and notes payable,a liability,both increased.There is no effect on the income statement,and the event is reported as a cash inflow from financing activities.

A Transaction Has Been Recorded in the T-Accounts of Hough