Chico Company Experienced an Accounting Event That Affected Its Accounting

question 133

Multiple Choice

Chico Company experienced an accounting event that affected its accounting equation as indicated below: Which of the following accounting events could have caused these effects on Chico's accounting equation?

• A)Issued common stock.
• B)Paid cash expenses.
• C)Borrowed money from a bank.
• D)Paid a cash dividend.

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Definitions:

ASIC

The Australian Securities and Investments Commission, which acts as the financial services and markets regulator in Australia.

Insolvency

The state of being unable to pay debts owed when they are due, leading to potential bankruptcy.

Corporations Act

The Corporations Act 2001 is Australian Commonwealth legislation that covers many aspects of the operations of Australian companies, including requiring certain types of entities to prepare financial statements.

Winding Up

The process of dissolving a company, where its assets are liquidated to pay off creditors, and any remaining assets are distributed among shareholders.