How Is the Balance Sheet Linked to the Other Financial

question 19

Multiple Choice

How is the balance sheet linked to the other financial statements?

• A) The amount of retained earnings is reported on the balance sheet as a liability.
• B) Retained earnings is added to total assets and reported on the balance sheet.
• C) Retained earnings from the statement of retained earnings is reported on the balance sheet.
• D) There is no link between the balance sheet and other statements, as each contains different accounts and provides different information.

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Definitions:

Liability

The state of being responsible for something, especially in terms of legal or financial obligations.

Creditors

Individuals or institutions to whom money is owed.

Cohesion

The tendency for a group to be in unity while working towards a goal or to satisfy the emotional needs of its members.

Social Class

A system of hierarchical social categories often determined by factors such as wealth, occupation, and education, which influence individuals' opportunities and life experiences.