Question

39) Delta a Company experienced an accounting event that affected its financial statements as indicated below: Stmt of Asset Liab· +| Equity | Rev.-Exp- Net Inc. NA NA Which of the following accounting events could have caused these effects on the elements of Delta's statements? 39) A) Earned cash revenue C) Paid a cash dividend B) Borrowed money from a bank D) Incurred a cash expense

Answer 1

D. Incurred a cash expenses

Explanation:

Incurrence of expense means cash paid for the expense which decreases the cash balance. There will be an increase in expense which decreases the net income and ultimately, the equity balance also decreases. And the cash expenses are generally related to Operating activities.