Which of the following is TRUE after net income has been entered in the appropriate balance sheet column?
A) Total debits in the Balance Sheet columns equals total credits.
B) Total credits in the Balance Sheet columns exceed total debits by the amount of net income.
C) Total debits in the Balance Sheet columns exceed total credits by the amount of net income.
D) It is impossible to determine with the information provided.

Question

Quizplus · Accepted Answer

Net income is a credit balance, so when it is entered in the balance sheet, it will increase the total credits. Since the balance sheet must always balance, the total debits must also increase by the same amount. Therefore, after net income has been entered, the total debits will equal the total credits.

Which of the Following Is TRUE After Net Income Has