Which equation represents an income statement?
A)Assets = liabilities + stockholders' equity.
B)Cash in - cash out = net income.
C)Revenues - expenses = net income.
D)Beginning retained earnings + revenues - expenses = ending retained earnings.

Question

Quizplus · Accepted Answer

The equation "Revenues - expenses = net income" represents an income statement, as it shows the revenue earned and expenses incurred during a period of time, with the resulting net income. Option A represents the balance sheet equation, option B is not a complete representation of an income statement, and option D shows the calculation of ending retained earnings, but does not show the full income statement.

Which Equation Represents an Income Statement