The income statement and the balance sheet for sole traders and partnerships are essentially the same except for transactions that directly affect:
A) profit.
B) income.
C) equity.
D) assets.

Question

Quizplus · Accepted Answer

Sole traders and partnerships do not have separate legal entities from their owners, and as a result, the equity section of the balance sheet represents the owner's capital account. Thus, any transactions that affect equity will differ between the two financial statements.

The Income Statement and the Balance Sheet for Sole Traders