Ask Experts Questions for FREE Help !
Ask
    acct_guy's Avatar
    acct_guy Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 21, 2008, 06:32 PM
    Income Statement & Balance Sheet
    Hi,

    My question is "how items from the income statement will impact the balance sheet".

    Thanks.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #2

    May 22, 2008, 03:59 PM
    Directly, they won't.

    Indirectly, net income from the income statement increases equity, which is on the balance sheet.
    delite's Avatar
    delite Posts: 202, Reputation: 3
    Full Member
    		  
    #3

    May 22, 2008, 09:18 PM
    Items for the p/l have a direct impact on the balance sheet. Increase or decrease in assets. Liabilities and retained must revert back to income/loss for finanacial income loss determines your current year e&p. increase in sakes would probably support an increase in act's rec.. . purchases to cover new sales will have an impact on payable and inventories. As such the first responder did adequately explain anything
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #4

    May 22, 2008, 11:47 PM
    And that is what I call "indirect," yes. Sales do not DIRECTLY go on the Balance Sheet. They INDIRECTLY affect other items that will end up on the Balance Sheet.

    The fact that you may "see" this differently does not make my answer incorrect. Regardless of whether an answer is adequate or not, it's not necessarily to point out that you think it's not. The only reason you are doing so is cause you're ticked off.
    rodgers7's Avatar
    rodgers7 Posts: 2, Reputation: 1
    New Member
    		  
    #5

    Nov 2, 2010, 03:39 AM
    Items from the income statement are used in calculating the retained earnings which directly affect equity.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Income statement, owners equity statement and balance sheet [ 6 Answers ]

Les Fleurs, a boutique in Paris, France, had the following accounts in its accounting records at December 31, 20X2 (amounts in Euros, denoted as "E") Purchases………………... E250,000 Freight In……………… E8,000 Sales discounts…………. 4,000 Purchase returns…….. 7,000 Inventory Sales…………………. ...

Financial Statement with Balance sheet and income statement [ 1 Answers ]

Here's the problem: The Hobart Company incurred the following transactions during 2003: A. Acquired $50,000 of cash capital from owners B. Paid $10,000 to acquire manufacturing equipment C. Paid $5,000 cash for materials used in production D. Paid $2,000 for wages of production workers...

Income Statement and Balance sheet [ 1 Answers ]

Is this correct Sales ($) 696,000 COGS 200,000 Gross Profit 496,000 Expenses 300,000 EBIT 196,000 Interest Expense 10,000 EBT 186,000 Tax Expense(40%) 36,000 Net Income 175,000

Balance sheet/income statement conversion [ 2 Answers ]

:cool: I am not sure where to post this accounting or finance I am thinking now probably accounting after ready another enmail so sorry for the duplication Income Statement -------------------------------------------------------------------------------- Balance Sheet December 31,...

Income statement and balance sheet [ 4 Answers ]

Help please here the question. 1. Study the following financial year accounts of Brakers Ltd and answer the following questions. Items on the income statement on 28 February 1985 Administration and sales expense 50 000 Interest paid 7 500 Gross income 157 500 Income before tax 100 000

View more questions Search