When the income statement indicates a surplus,this may be used to increase net worth by increasing assets or decreasing liabilities.

Question

Quizplus · Accepted Answer

When there is a surplus on the income statement, this means that there is extra revenue or income after expenses have been paid. This extra money can be used to increase net worth by either increasing assets (such as investments or property) or decreasing liabilities (such as paying off debts or loans). By doing so, the surplus can increase the overall value of the organization or individual's net worth.

When the Income Statement Indicates a Surplus,this May Be Used