Cohen 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 Cohen's statements?
A)Paid a cash dividend.
B)Earned cash revenue.
C)Borrowed money from a bank.
D)Issued common stock.

Question

Cohen 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 Cohen's statements?
A)Paid a cash dividend. 
B)Earned cash revenue. 
C)Borrowed money from a bank. 
D)Issued common stock.

Quizplus · Accepted Answer

Issuing common stock would increase assets (cash) and increase equity (common stock). It would not affect net income, but would be reported as a cash inflow from financing activities on the statement of cash flows.

Cohen Company Experienced an Accounting Event That Affected Its Financial