Which of the following describes the effects of an asset use transaction on the elements of a company's financial statements?

A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following describes the effects of an asset use transaction on the elements of a company's financial statements?

A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

An asset use transaction decreases assets and decreases either liabilities (in the case of repaying debt)or equity (in the case of paying dividends or expenses).It may or may not increase expenses and decrease net income.If the asset that decreased is cash,it will be reported as an outflow for financing or operating activities on the statement of cash flows.

Which of the Following Describes the Effects of an Asset