Delta Company Experienced an Accounting Event That Affected Its Financial

question 37

Multiple Choice

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

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment is accounted for based on the investor’s share of the investee's equity.

Stock Investments

Financial assets consisting of stakes in companies through the purchase of common or preferred stock shares, with the expectation of earning dividends or capital gains.

Net Income

The amount of money that remains after all operating expenses, taxes, and dividends have been paid, representing the company's profit.

Cost Method

An accounting method used to value inventory or assets, based on the price paid to acquire them.