The excess credits (or debits) on the income statement are used to decrease (or increase) the equity account.

Name: The excess credits (or debits) on the income statement are used to decrease (or increase) the equity account.
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Question

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Excess credits or debits on the income statement affect net income, which in turn impacts retained earnings, a component of equity, but they do not directly decrease or increase the equity account.

The Excess Credits (Or Debits) on the Income Statement Are