We have used transaction analysis and the accounting equation to record several transactions for a company.The transactions are now recorded on a multi-column spreadsheet of the assets,liabilities and stockholders' equity of the company.If you wanted to prepare an income statement with this spreadsheet,which column would you use?
A)Cash column
B)Accounts Payable column
C)Dividends column
D)Retained Earnings column

Question

Quizplus · Accepted Answer

The income statement is a financial statement that reports the revenues and expenses of a company over a specific period of time. It does not involve the cash or accounts payable columns, but it does affect the retained earnings column. Therefore, the income statement would be prepared using the Retained Earnings column.

We Have Used Transaction Analysis and the Accounting Equation to Record