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 the elements of 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 the elements of 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