The Net Income amount from the Income Statement is used as a line item on which statement? (Points: 5)
Profit and loss statement
Statement of owner's equity
Balance sheet
Trial balance
help please not sure what is meant by line item
hello anybody somebody???
A line item refers to a specific entry or item listed on a financial statement. In this case, the question is asking which statement includes the Net Income amount as a line item.
To determine the answer, you need to understand the purpose of each of the given statements:
1. Profit and loss statement: Also known as an income statement, it summarizes the revenues, expenses, and net income or loss of a business over a specific period.
2. Statement of owner's equity: This statement shows the changes in the owner's equity account, including contributions, withdrawals, and net income.
3. Balance sheet: This statement presents the financial position of a business at a specific point in time, listing its assets, liabilities, and owner's equity.
4. Trial balance: While not a financial statement itself, a trial balance is a worksheet that lists all the accounts and their balances to ensure that the debits and credits are equal.
Now, to answer the question, the Net Income amount from the income statement is used as a line item on the:
- Profit and loss statement (also known as the income statement)
Therefore, the correct answer is:
- Profit and loss statement.