The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals: To enter the net income (or loss) for the period into the above worksheet requires an entry to the
A) income statement debit column and the balance sheet credit column.
B) income statement credit column and the balance sheet debit column.
C) income statement debit column and the income statement credit column.
D) balance sheet debit column and the balance sheet credit column.

Question

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals:  To enter the net income (or loss) for the period into the above worksheet requires an entry to the
A) income statement debit column and the balance sheet credit column. 
B) income statement credit column and the balance sheet debit column. 
C) income statement debit column and the income statement credit column. 
D) balance sheet debit column and the balance sheet credit column.

Quizplus · Accepted Answer

Net income (or loss) is entered in the income statement credit column and the balance sheet debit column. This is because net income increases retained earnings on the balance sheet and is itself a credit on the income statement.

The Income Statement and Balance Sheet Columns of Beer and Nuts