022: How are the Balance Sheet & Income Statement related? - published 06/22/2020

A company's Balance Sheet and Income Statement are linked through Net Income for the period, and any subsequent increase, or decrease, in Owner Equity that results. Accountants refer to the Income Statement accounts (such as; Revenues, Expenses, gains, losses) as "Temporary accounts", because their balances will be closed and transferred to the Owner's Equity (i.e. Capital) account at the end of the year.