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Which of the following statements is true? -When operating income is positive, revenue is greater than...

Which of the following statements is true?

-When operating income is positive, revenue is greater than expenses.

-When net income is negative, retained earnings decrease, all other things being equal.

-When net income is positive, Shareholders' equity increases, all other things being equal.

-All of the answers are acceptable.

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Homework Answers

Answer #1

All the answers are acceptable

When operating income is positive, revenue is greater than expenses. Nwt income = Revenue - expenses

When net income is negative, retained earnings decrease, all other things being equal. net income negative means loss that loss will adjust to retained earnings so it will be negative

When net income is positive, Shareholders' equity increases, all other things being equal.net income positive means Profit that profit will adjust to retained earnings so it will be increase

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