The net income for a period and the financial position at the end of the period are
A)interrelated.
B)independent.
C)relevant.
D)irrelevant.
E)autonomous.

Question

Quizplus · Accepted Answer

The net income for a period, which is a part of the income statement or statement of comprehensive income, and the financial position at the end of the period, which is a part of the balance sheet, are interrelated. The net income affects the retained earnings, which is a part of the equity section of the balance sheet. Therefore, the net income impacts the financial position at the end of the period.

The Net Income for a Period and the Financial Position