Which of the following is a control that is built into the integrated financial statement approach?
A) Assets + Liabilities = Stockholders' Equity
B) Cash from operating activities is equal to cash on the balance sheet.
C) Net income on the income statement must equal the net effects of revenues and expenses on retained earnings.
D) Total assets on balance sheet should equal income from investing activities on the statement of cash flows.

Question

Quizplus · Accepted Answer

The control built into the integrated financial statement approach is that the net income on the income statement must equal the net effects of revenues and expenses on retained earnings. This ensures that there are no errors or omissions in the calculation of net income, and that all revenues and expenses have been properly accounted for in determining the company's retained earnings. Choices A, B, and D are not controls but rather basic principles of accounting that are used in creating financial statements.

Which of the Following Is a Control That Is Built