Smith Corp. earned $300,000 profit during 2018. On which financial statement(s) will the exact dollar amount of the profit be clearly stated?

Question

Quizplus · Accepted Answer

The profit amount is directly reported on the income statement as it shows the company's revenues and expenses, leading to net income or profit. It also affects the statement of shareholders' equity through retained earnings, which is why both statements will clearly state the profit amount. The balance sheet indirectly reflects profit in the equity section but does not state the profit amount for the period explicitly.