The statement of owner's equity is the link between the income statement and balance sheet.

Question

Quizplus · Accepted Answer

The statement of owner's equity shows how the company's net income from the income statement has affected the owner's equity section of the balance sheet. It reconciles the beginning and ending balances of owner's equity by showing any changes due to net income, dividends, and additional investments or withdrawals by the owner. Therefore, it serves as a link between the income statement and balance sheet.

The Statement of Owner's Equity Is the Link Between the Income