The Income Statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520. What does this information mean to the accountant?
A) There is a net income of $21,720.
B) There is a net loss of $21,720.
C) The accounts are out of balance, indicating that an error has been made.
D) The accounts have not been updated.

Question

Quizplus · Accepted Answer

The difference between the credit and debit columns in the Income Statement columns indicates the company's net income. Since credits exceed debits, it means the company has a net income of $21,720.

The Income Statement Columns in the End-Of-Period Spreadsheet Show That