An income statement connects two successive _____ through its effect on retained earnings.
A)balance sheets
B)cash flow statements
C)cash receipts and disbursement statements
D)funds flow statements
E)financing statements

Question

Quizplus · Accepted Answer

An income statement shows a company's revenues, expenses, and net income (or loss) over a specific period of time. The net income is transferred to the retained earnings portion of the balance sheet, connecting two successive balance sheets through its effect on retained earnings.

An Income Statement Connects Two Successive _____ Through Its Effect