Question

During its first year of operation, Cade Company experienced the following events.

A) Issued common stock for $7,000 cash
B) Earned $5,000 of cash revenue.
C) Paid $3,000 of cash expenses.
D) Paid cash dividends amounting to $1,000

Answer 1

Paid $3,000 of cash expenses During its first year of operation, Cade Company experienced the following events.

so the correct option is c. Paid $3,000 of cash expenses.

Step-by-step explanation:

When a company pays cash expenses, it signifies a reduction in its available cash resources. This aligns with the basic accounting principle of cash transactions, where cash payments directly impact the company's liquidity.

Paid: This indicates the action of disbursing funds.

$3,000: Specifies the amount of cash paid.

Cash Expenses: Represents the type of transaction, indicating that money was spent on operating expenses.

This event directly affects the company's cash flow, reflecting the actual outflow of cash during the first year of operation.

correct answer is C. Paid $3,000 of cash expenses.