If a company prepares a statement of stockholders' equity,net income is added to retained earnings on this statement.

Question

Quizplus · Accepted Answer

Net income is one of the components of retained earnings, which is a part of stockholders' equity. Therefore, adding net income to the beginning balance of retained earnings will result in the ending balance of retained earnings on the statement of stockholders' equity.

If a Company Prepares a Statement of Stockholders' Equity,net Income