Forman,Inc.earned $600,000 profit during 2017.On which financial statement(s)will you find the dollar amount of the profit earned by the company?

Question

Quizplus · Accepted Answer

The dollar amount of profit earned by the company will be reported on both the income statement and the statement of retained earnings. The income statement shows revenues, expenses, and the resulting net income or loss for a specific period, which includes the calculation of profit earned. The statement of retained earnings shows how the net income from the income statement is allocated to various accounts, including retained earnings, and the resulting changes in those accounts. Therefore, the profit earned by the company will be reflected in both financial statements.