Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 1 - Introduction to Financial Statements - Questions: 17

Answer

a) Both include net income. b) Both show stockholders' equity. c) Both show the value of cash accounts.

Work Step by Step

a) The income statement shows net income for a given period. Net income is shown on the retained earnings statement because it increases retained earnings. b) The retained earnings shows the current retained earnings balance. Retained earnings is a type of equity that is shown on the balance sheet. c) The balance sheet lists all the assets of a company. The cash balance shown on the cash flow statement is a type of asset.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.