The balance sheets at the beginning and end of a time period are linked by the income statement,the statement of cash flows,and the statement of retained earnings for the time period.

Question

Quizplus · Accepted Answer

The income statement shows the revenues and expenses for the time period, which affects the retained earnings. The statement of cash flows shows the inflows and outflows of cash for the time period, which also affects the balance sheet. Together, these statements link the beginning and end balance sheets for the time period.

The Balance Sheets at the Beginning and End of a Time