Which of the following equations best describes the income statement?
Posted: Sat Aug 07, 2021 6:48 am
A) Assets − Liabilities = Stockholders' Equity.
B) Net income = Revenues + Expenses.
C) Net income = Revenues − Expenses.
D) Retained earnings = Net Income + Dividends.
Answer: C
Explanation: The income statement equation is revenues − expenses = net income.
B) Net income = Revenues + Expenses.
C) Net income = Revenues − Expenses.
D) Retained earnings = Net Income + Dividends.
Answer: C
Explanation: The income statement equation is revenues − expenses = net income.