which-statement-is-most-directly-affected-by-a-change-to-net-income-a-balance-sheet-b-income-stateme

Question

Which statement is most directly affected by a change to net income?
A. balance sheet
B. income statement
C. statement of retained earnings
D. statement of cash flows

Puneet Prajapati · Accepted Answer

Okay, so we will understand the meaning of income statement. And we will also understand that, but our food does it produce, okay? And the implications. So income statement is one of the financial statements which is prepared by an entreaty assess that how much profit or lost the entity has indicated within the current financial year from the four operations for which the entity has been established. Okay, so I will brought down the indicated former, but we will also draw the tail former. Then they will face much complex accounting problems. Okay, so in the in concert Mint Buster fall, we will have our sales element because we have established our business, but making more sales. Okay, so people have seen some of okay, Then we will have expenses. Expenses, all sort like Costa Book sold. Electricity experience, Telephone experience card with expense being expense station expense. A lot more. Okay, So even deductible expenses. Who are either? Nothing. However, traditionally net income waas previously known Toby profit or loss. Okay, If net income is positive, then it is profit. Other vice, it is a loss. So we showed that income in negative to show that the the entity has incurred a loss. Okay. However, if the net income is oppose, difficult than it is a prophet, obviously. Okay, so let&#x27;s suppose there is a changing that didn&#x27;t go because off, because off unidentified expenses under identified sales. So there is a change in neck, so we will write it down. Okay, So changing they didn&#x27;t come will directly affect very erratically effect. The in comes to right, because income statement is producing the net income as the output. Okay from this statement. So that is why. And they will be changing, letting go. So it feels that a key affecting becomes okay. It means we have identified other choice. Okay, So the correct option that matches with our solution his choice be however you can write what I&#x27;ve done so far but joins me is the correct answer. Okay?

Puneet Prajapati · Answer

Okay, So we are doing the stag in Hendry. What is the meaning of it and looted expects. Okay, so in 20 is nothing. It is thieves all McKinney in. Okay, it is the law practice cheesed by business entity who put a bed finished course. Okay. I like to support Date is our That is a business on it. Always dealing in business, off selling for me. Chip, perhaps, like chairs and tables. And so for sex. And likewise. Okay, so he has to acquire Roma TDN. Okay? He has to be acquired. Rahmati, that people says such girls. Okay, now what happens? They never Then whenever I need business or any business or chases the inventory, Okay, What happens? There are new circumstances. 1st 1 is that for purchasing the 20. The business entity pays cash with a supplier. Okay. Against the chains, off material or in mentally on the supplier. Okay. And back bush in that cash to supplier will be considered in incomes to Okay, but let&#x27;s suppose we have a good relations with suppliers and supplier may allow credit off who? Three. Once the business. Okay from movie. A case of it in 20. Okay, so it will become our level. If you will not be the supplier immediately on purchasing off from material orange country, then it will become a liability. Okay, so it will be classy fighting that in sheet. Okay, so one once again, like the recluse circumstances and veep urges Elementary. Either we will a gastro supplies immediately the lock and we would pay later on in time. And that component will be classified in Bellingen. Okay, so that is what we have given in the current caution. Okay, we can also this liability. We can also we can also refer to it. That&#x27;s supplies. Okay. And this is supplies expense. So expense will be recorded income, statement and liability part because it is not a liability. It is just the inventor. Okay, so it will be classified in balance sheet. So that matches with Joyce. Hey, that is that engine. Okay, So supplies will be classified in bed, and she&#x27;s okay. That&#x27;s all part of a solution. However, you can write cheap mobile as well as she remembered on your load books for future reference. But answer will beat choice. Okay. Thank you.

Puneet Prajapati · Answer

Okay, So you are going to understand They don&#x27;t deposition, Okay? Little concepts. That How movie? The Gordie charging more in that position. Expense. Okay. The 1st 2 the amount off expense, most of the amount of experience that would be charged. Who comes who? The select beer and off a sect on yearly basis. Okay, so this definition shows that the deposition is an amount which is charged who income and income statement who show that baby is dearly the reason value of the asset, if you will use the except for of it production, Get a city. Okay, let&#x27;s suppose you have purchased the machinery on starting off your business, okay? To produce for nature processed Jaber air chairs and tables like that. Okay, so if you have purchased machine beyond first and very 2019 then let&#x27;s suppose you have purchased off $1000. So will actually remain same or the upcoming years. No, it&#x27;s not revenge. It will be decreasing. Okay. The value will decrease by that. So because it&#x27;s it will be used accordingly. Produced the for me. German. Did it hurt? Okay, so regard the deposition. We have first method that he will do like this. They record two types of entries. Okay, Their position, account epic. Who? A cynical. Okay. And it will be about this is the general in three. Okay, we have passed. Imaginative. So this is a direct entry to the court in that position, Like the deposition will be judged Do the respective, like machine three or any table for nature that is used for business purposes. Okay, so and it is a second mattered. And second method is used very because it very widely in the industry. And there&#x27;s a magnet off for security purposes. Basically. So that position account deputed to acumen into that position. Okay, so so in second method, what we have didn&#x27;t understand first method. Then they will face problems later, toe that however, we will understand. Second method. So it is the expense. It will be transferred to income statement. Okay. Like it down. This is the that. I don&#x27;t before shoot in second shoot for your difference. Okay? And I don&#x27;t do that. Precision expense will be transferred to incoming statement. Then I did actual profit and loss. Okay. However, a community that position will be shown in bed and cheap Okay, Now why do we use second method Will understand this. That&#x27;s first of all. See this? That gift their position expense is charged in first matter. Then I said value is also decreased by the proportionate amount. OK, but in second method, what happens? The assert is reflected and violent Shoot at the actual cost. And the person that it is an expense charge on the early basically transfer through the circle community deposition who see So the identity will be able to see that Helmand deposition expense. We have charged so on. Okay? And how much book value off A sets an actual cost of asserts via having like no one ever Belen. Shit. Okay, so that is right. Accumulator deposition will be transferred to that and cheat. Okay. And back matches that matches. So the solution matches with the choice A. Okay, so the correct choice is choice. Okay. Always you can write. She&#x27;d violent you do for your future reference. That&#x27;s all for our current solution. Thank

Puneet Prajapati · Answer

Okay, So via going to understand, they don&#x27;t reading earnings. Okay, little suspects. Okay, so it is the Ammon Dogs. That is gender YouTube by the business entity. Okay, which is get or we can say, which is not distributed among shareholders. It is mostly used in expending business projects. Okay, so we have defined that forbids the actual meaning over terrain ordinance. Okay, so it is the amount of profits that of business and read it keeps in its reserves, and it is generally not distributed among she and orders. OK, so let&#x27;s is it borders and indeed Legionaries $1000 of profit in India? So it is very likely if the entities practicing the distribution of dividend to the extent off Lexus 70 was it that this $700 so $300 will be, but your dander needs and $700 would be that dividend. Okay, So if the dividend competent will put to shareholders, undertake, the angel wings will be used for expending business projects. Okay, because some time it happens that the company, you know, being need all forms. So that is why the this portion is kept always so that the completely never shot off us, okay? No, like this. Understand? There, there, they retain their next balance will come. Okay, so first of all, be everything that What is that, Jimmy New over carrying on things? No, that retained earnings. It will first come to melon cheek. Okay, by that. So because it deep is aims that what is the actual amount that entity is having in terms off results? Who explained the business projects who find the day to day business from the chance? Okay, so this account will be classified in there, this different. Okay, Now, what happens then? When they deserve specific purpose to prepare off particular fan inches or bigger statement so that it will be could be a day specifically for that purpose. Okay. And in that case, we have we will have, but it ain&#x27;t nothing. Statement, okay? And that who is also required aspect regulatory class. Okay, sold This one as well as this one will have retained earnings balance as them as the one of the components. Okay, which has to be reported. As for the evaluating requirement. Okay, so that&#x27;s all for our solution. So that is why we have two choices that matches with the current solution that this a and see So the correct choice. This, uh see. Okay, that&#x27;s all for this edition. Thank you.

Puneet Prajapati · Answer

Okay, So let us understand the current solution for the problem. Okay? First off, one, we will understand what other financial statements. Then we will move to government solution. Okay? You It comprises off. Really detailed statement off financial position off. And then Judy distracting the liquidity decked gash, flu, gas, fuel positions. Okay. So far in just eight minutes, it comprises off the statement of financial position, often entity deflecting liquidity, debt and Castro. I think we do not need to write this one. It&#x27;s enough to pull this off. So Okay, sore. And now let&#x27;s move to the actual elements off an injustice. So financial statements includes. So I&#x27;m going to write. I&#x27;m going to write in the sequence and you have to follow the sequence whenever you move to the later advanced advanced problems. Okay, so first of all, after the accounting cycle and after the nor the carbon cycle, Okay, selects that I down the hierarchy. Then I will make you understand that how the process works. First of all, we prepare income statement. Okay? Please write it down. First of all, ve prepared income statement ordered by that we prepare the balance sheet followed by that be prepared. Statement off gas flows, then north to Because Okay, this is the This is the hierarchy. Okay, so I have won so many that adult like it&#x27;s a first. First. Is this one second? Is this one? Hired Is this one? And at the last four this this one. Okay, now what is income Statement? Berlin. She stay put off Castro. All those two counts. We will later understand? We will later it understand? But as the main solution off our current problem, this is the gun. So I will try to define it more briefly. Okay, so in comes a clipboard. Does it show it chose the net profit off the company? Oh, we can see net profit loss off the company gender. You dude, I do indeed. Going. Okay. So I just reflected how much profit our laws. The entity has energy during the current gator. That&#x27;s on the in comes a grim purpose, So Okay, No, As of Amine solution, what is our main solution then? So the correct choice for problem for Dylan is be that this income state that it is the first thing This statement is the first thing doctors needed to be prepared before the balance ship rotation. Okay, so that&#x27;s all for our current solution. Thank you.

Puneet Prajapati · Answer

Okay, So let us understand the current solution, But before moving to the institution vigilance and understand the concept off religious statements. And how do we teach to the occupation of financial statements? Okay, let&#x27;s suppose we have Ah, business off. Setting radio gives. Okay. Okay. This is over business. OK, so whenever be sell, you begin to customer. Or more specifically, Children. What happens? It consists off to evens be sell video games to the beatings. Okay. The parents of the Children and the parents give us money back against the video gives. So they&#x27;re supposed to be up financial drawn. The chip often. Angel religion is a plan in action. Victor. Ricin Villas exchange off money against the goods and services. Okay. It is very, very well industry. Okay, now what happens in the business? There is a cities of transactions. Let&#x27;s suppose 100. Okay, So what happens? Who to get a clear idea that how many transactions has the the entity has entered with other entities or other persons? Okay, we need to record or those transactions. Okay. After that, we get a detailed summary that war type off transactions happened with veg entities. How much the amounts. How much the amounts of the transaction happened with entity And, like, Vice. Okay, that comes from the posting. So posting provides it. They&#x27;re detail. Somebody off transactions happened with them. Entity. Okay. And an entity or different types of amputees. After posting, we have some organization. Now at this immunization process. What happens? This dictated details. Memorization becomes very brief in this process, and this is done to trial ballots. You can know this diagram on your notebooks also. Okay. No. After moving to brief brief civilization, they Then finally, it comes to the financial statements. There be prepared balance sheet. First of all, we do not prepared Ben, and she&#x27;d be prepared Income statement then moved to balance sheet, then moved to statement of cash flows. Okay. And like rice, So this is the process. Okay. This is also loan as accounting cycle. This process is known as a camping cycle. The process off accounting in any type of organisation. Okay, So we have a business of video games and the process to record the transaction. Italy and off probation, orphanages, statements. A potion has Oz. Says what? Which of the falling is not included in the ban. Interesting. So for the information financial stake names will include First of all, it will include income statement. What is income statement? What is well in sheet? We will discuss Ben. We will face the problems allergic to sit concepts. And then you just take a note off it for the for the current solution. OK, then we prepare the balance sheet, okay? And it last beep. Very cash. Mr. Yes, Mr. Okay, that&#x27;s clear. So the potion disasters. Which of the following is not included in financial stickers? So the correct answer we can die from the from from about explanation we have made so far that make choices The statement off owner investments. Okay, that statement is not included in financial statements, so you can know down. So she&#x27;d one she toe on the in orders for back a revision. However Indian, we have a conclusion uncertain as correct choice says the Okay, that&#x27;s all for another solution. Thank you.

Problem

Michelle Company reports $\$ 345,000$ in credit s…

Problem 17 Medium Difficulty

Which statement is most directly affected by a change to net income?
A. balance sheet
B. income statement
C. statement of retained earnings
D. statement of cash flows

Answer

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Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting