An Increase in Net Income Does Not Affect Shareholders' Equity

question 5

True/False

An increase in net income does not affect Shareholders' equity.

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Definitions:

Accounting Equation

The fundamental equation of double-entry bookkeeping that states assets equal liabilities plus equity, serving as the foundation for a balance sheet.

Owner's Equity

The total value of assets owned by the proprietor of a company after all debts have been subtracted.

Balance Sheet

A delineation of a company's financial status including assets, liabilities, and shareholders' equity at an exact point in time.