How is the balance sheet linked to the other financial statements?

Accounting
Tutor: None Selected Time limit: 1 Day

1 amount of retained earnings reported is equal to net income

2 there is no link, each contains different accounts and provides different information

3 retained earnings is added to total assets and reported on balance sheet

4 net income increases ret. earnings on statement of ret. earnings, which ultimately increases ret. earnings on the balance sheet

having a hard time understanding why both 2 and 4 are not correct?

Sep 10th, 2015

Thank you for the opportunity to help you with your question!

the correct answer is

4. net income increases ret. earnings on statement of ret. earnings, which ultimately increases ret. earnings on the balance sheet

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 10th, 2015

Thank you, great explanation - thanks again.  

Sep 10th, 2015

Welcome am happy to help you. Do you still have more questions?

Sep 10th, 2015

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