Question: In a horizontal financial statement, the arrow from net income to stockholders' equity indicates that Blank _ _ _ _ _ _ . Multiple choice

In a horizontal financial statement, the arrow from net income to stockholders' equity indicates that Blank______.
Multiple choice question.
net income affects paid-in capital, which is a component of stockholders' equity
both the income statement and the balance sheet are overstated by the amount of net income
net income for any given year must always be greater than the amount of dividend paid to stockholders
net income affects retained earnings, which is a component of stockholders' equity

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