How is the income statement linked to the balance sheet?

Asked by Last Modified  

4 Answers

Follow 0
Answer

Please enter your answer

Interested to teach to class 1 to 5 , 6 to 10 , 11&12

The bottom line of the income statement is net income. Net income links to both the balance sheet and cash flow statement. In terms of the balance sheet, net income flows into stockholder's equity via retained earnings.
Comments

Chartered Accountant

The surplus/deficit of the Income & Expenditure Statement adds up to the Capital Account in the Balance Sheet.
Comments

Net profit determined as per income stamen is added to capital in Balance Sheet in case of proprietory concerns and shown as a separate item in Balance Sheet in case of corporate organizations.
Comments

Accounts Teacher

The business runs to earn profit (revenues minus all expenses). This profit is to be repaid to the owners of the business. The net profit (from P&L) gets added to Capital as a liability (Business needs to pay this to the Owner)
Comments

View 2 more Answers

Related Questions

Can you tell me the straight line method to calculate depreciation?
(Purchase price of asset +installation & other exp relating to purchase of asset as per AS-scrap value/no. of years of its economic life of asset. Each year depreciation charged will be equal amount.
Prabhash
0 0
6
What skills should a Bcom student build?
Financial skills, IT skills for softwares related to finance and accounts, Communication skills, Personality skills, Skills to develop confidence, Etc. Wishing you all the best.
Nishant
0 0
8

Now ask question in any of the 1000+ Categories, and get Answers from Tutors and Trainers on UrbanPro.com

Ask a Question

Related Lessons

Taxation issues on restaurant bill
Taxation system in Restaurant It is well known by the consumer that restaurant normally charge for both component ‘Goods and Services’. For goods component, value added tax are charged at...

Introduction Of Auditing
What is Audit? It can be said that auditing is the process by which a competent independent individual collects and evaluates evidence to form an opinion and communicates his opinion to the person interested,...

Consignment Meaning & Features
Meaning & Features Of Consignment Meaning: Consignment means the transaction of sending goods by one person (called CONSIGNOR) to another (called CONSIGNEE) who is to sell those goods on behalf of...

Fundamentals Of Accounting
Every Individual performs some kind of economic activity. All the economic activities are run for an individual benefit and may create social benefit, an i.e. benefit for the public at large. For eg,...

How to Pass Entries under GST Regime?
How to Pass Entries under GST Regime: Under the new GST Regime all these taxes (excise, VAT, CST, Service tax, Entry Tax) will get subsumed into one account and assesse will get benefit of setting of...

Recommended Articles

E-learning is not just about delivering lessons online. It has a much broader scope that goes beyond manual paper or PowerPoint Presentations. To understand the reach of E-learning and how the whole process works in developing the Educational system, we will discuss a few points here. Let us find out how this new learning...

Read full article >

While schools provide formal education to the children, the home is where they start learning about things informally. Parents think that schools will take the initiative to educate their children. Well, this is partially true, as parents also play an essential role in bringing up their child. For the development of particular...

Read full article >

With the current trend of the world going digital, electronic renaissance is a new movement that is welcomed by the new generation as it helps makes the lives of millions of people easier and convenient. Along with this rapidly changing movement and gaining popularity of Internet, e-Learning is a new tool that emerging...

Read full article >

Learning for every child starts from a very young age. While the formal methods include school curriculums and private lessons, the informal methods include dancing, music, drawing, and various fun-filling activities. Playing games and practising these types of activities helps the children get out of boredom and...

Read full article >

Looking for BCom Tuition ?

Learn from the Best Tutors on UrbanPro

Are you a Tutor or Training Institute?

Join UrbanPro Today to find students near you