The net income shown on the income statement also appears on the:
A)balance sheet and statement of operations.
B)statement of retained earnings.
C)statement of cash flows,if the indirect method is used.
D)B and C.

Question

Quizplus · Accepted Answer

Net income is reported on both the statement of retained earnings and the statement of cash flows (if the indirect method is used). The statement of retained earnings shows how the net income from the period affects the retained earnings, while the statement of cash flows adjusts net income for the changes in working capital and non-cash transactions to show the cash generated or used by operating activities.

The Net Income Shown on the Income Statement Also Appears