There is no direct relationship between the income statement and balance sheet.

Question

Quizplus · Accepted Answer

The income statement and balance sheet are closely related and complementary financial statements that provide different insights into a company's financial performance. The income statement shows a company's revenues and expenses over a specific period of time, while the balance sheet shows a company's assets, liabilities, and equity at a specific point in time. The net income or loss from the income statement is ultimately reflected on the balance sheet as retained earnings or accumulated deficit. Additionally, changes in items on the balance sheet, such as investments or debt, may impact the income statement through interest income or expense.

There Is No Direct Relationship Between the Income Statement and Balance