A (n) ______ is a financial statement that is directly based on the accounting equation.
A) income statement
B) balance sheet
C) statement of cash flows
D) statement of changes in retained earnings

Question

Quizplus · Accepted Answer

The balance sheet is directly based on the accounting equation, which states that assets equal liabilities plus equity. Therefore, the answer is B. The other statements are derived from information on the balance sheet.

A (N) ______ Is a Financial Statement That Is Directly