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Which of the following reflect the relationship between the balance sheet, income statement, job cost ledger and equipment ledger? can be more than one answer
When there is a change in net worth we know that there needs to be changes on the income statement so that the change in profit is equal to the change in net worth; conversely when there is a change in profit we know that there needs to be changes on the balance sheet so that the change in net worth is equal to the change in profit.
or
When the changes to the revenues are not equal to the changes to the expenses and profit on the income statement we know that the transactions are incorrect or additional transactions are needed.
Or
When the changes to the asset accounts are not equal to the changes to the liability and net worth accounts on the balance sheet we know that the transactions are incorrect or additional transactions are needed.
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