Any transaction that affects the income statement ultimately affects the balance sheet through the balance of retained earnings.

Name: Any transaction that affects the income statement ultimately affects the balance sheet through the balance of retained earnings.
Brand: Quizplus
Rating: 4.9 (43 reviews)

Question

Quizplus · Accepted Answer

Retained earnings is a part of shareholders' equity on the balance sheet, and any changes to net income (as shown on the income statement) will affect retained earnings, thereby impacting the balance sheet.

Any Transaction That Affects the Income Statement Ultimately Affects the Balance