WGU D774 SECTION 2 TEST LATEST UPDATED
The balance sheet
prepared at a specific moment in time
An operating statement, often known as the income statement or the statement
of cash flows, and comparative balance sheets have an articulation relationship.
The change in one item on the balance sheet from one period to the next is
explained by an item on the operating statement.
The retained earnings statement illustrates how the retained earnings balance
varies from one period to the next.
When a business declares net profits, retained earnings rise.
When a business pays dividends to its owners or has a net loss, retained
earnings decline.
The linkages among the three financial statements shed light on how the balance
sheets of two successive quarters differ in terms of chase and retained earnings.
Understanding the company's income statement and cash flow statement is
essential for comprehending the balance sheet and figuring out how the
numbers changed because cash and retained profits balances are such significant
components of the balance sheet.
Financial statement users can see a company's entire financial picture and
comprehend the reasons behind variations in financial statement balances with
the aid of articulation between the financial statements.
