Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 1 - Introduction to Financial Statements - Questions - Page 27: 10

Answer

Yes.

Work Step by Step

Computing net income is a primary function of the income statement. If not distributed, net income becomes part of the retained earnings and is shown on the retained earnings statement. Retained earnings are one of the types of equity shown on a balance sheet.
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