Forest Beach Company experienced an event that had the following effects on its financial statements. Balance sheet Income Statement Statement of

Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flows

NA = NA + NA NA - NA = NA + IA

Which of the following events could have caused these effects?

a. Accrued interest revenue.

b. Loaned cash to an employee.

c. Collected cash for the principal balance of a note receivable.

d. Borrowed cash from a bank.

Question

Business

Braeden Wheeler

30 May, 04:15

Forest Beach Company experienced an event that had the following effects on its financial statements. Balance sheet Income Statement Statement of

Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flows

NA = NA + NA NA - NA = NA + IA

Which of the following events could have caused these effects?

a. Accrued interest revenue.

b. Loaned cash to an employee.

c. Collected cash for the principal balance of a note receivable.

d. Borrowed cash from a bank.

+3

Answers (1)

Know the Answer?

Alanna Weber · Answer 1

(C) Collected cash for the principal balance of a note receivable

Explanation:

This is so because paying off principal balance of a note payable will definitely reduce cash asset and ultimately lead to liabilities of note payable. The cash outflow from the payoff of the note payable would be classified as a financing activity, and this way the the income statement is not affected.