Chico Company Experienced an Accounting Event That Affected Its Accounting

question 63

Multiple Choice

Chico Company experienced an accounting event that affected its accounting equation as indicated below:
$$\begin{array} { | c | c | c | c | c | c | c | } \hline \text { Assets } & = & \text { Liabilities } & + & \begin{array} { c } \text { Commnn } \\\text { Strok }\end{array} & + & \begin{array} { c } \text { Retained } \\\text { Eurnings }\end{array} \\\hline + & = & \text { NA } & + & + & + & \text { NA } \\\hline\end{array}$$
Which of the following accounting events could have caused these effects on Chico's statements?

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

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Definitions:

Nonpossessory Interest

A right or interest in a property that does not include the right to possess the property itself, such as an easement or right-of-way.

Tenancy in Common

A type of joint ownership of property where each owner holds an undivided interest and rights to the property, but without survivorship rights.

Tenants by the Entirety

A form of joint property ownership available to married couples, where each owns the entire property and rights of survivorship are included.

Earnest Money

A deposit made to a seller indicating the buyer's good faith, seriousness, and intent to complete the purchase transaction.