Author Question: The income statement explains all changes in the assets, liabilities, and equity of a company ... (Read 64 times)

tichca · **on:** Jul 6, 2018

The income statement explains all changes in the assets, liabilities, and equity of a company between two consecutive balance sheet dates.

Indicate whether the statement is true or false

Question 2

Otto Company paid a credit on account, 1,500 . Which of the following is true in regards to the fundamental accounting equation?
a. Assets increased by 1,500.
b. Liabilities increased by 1,500.
c. Liabilities decreased by 1,500.
d. Owner's equity increased by 1,500.
e. Owner's equity decreased by 1,500.

zoeyesther · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

FALSE
Explanation: The income statement explains some, but not all, changes in the assets, liabilities, and equity of a company between two consecutive balance sheet dates.

Answer to Question 2

C