CFA Practice Question

There are 96 practice questions for this study session.

CFA Practice Question

Which balance sheet line item is closely related to income statement projections?

A. accounts receivable.
B. retained earnings.
C. invested capital.
Correct Answer: A

Retained earnings flow directly from the income statement.

User Contributed Comments 3

User Comment
tbg091789 The 1st sentence in Subject 3 says so.
akirchner1 Some balance sheet line items such as retained earnings flow directly from the income statement whereas other lines, such as accounts receivables are very closely linked to the income statement projections.
jimmyvo Per both the the Subject #3 reading here and the CFAI textbook. Account Receivable is closely related to projections. Retained earnings flow directly from income statement.
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