Which of the statements below indicates that a company earned a net income for the period?

A. The sum of the credits exceeds the sum of the debits in the Balance Sheet columns on the work sheet.

B. The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.

C. The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet.

D. Cash inflows exceeded cash outflows

The correct answer is letter "B": The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.

Explanation:

Net Income, bottom line, or total earnings or profits is a measure of how profitable the company is over a period of time. To find net income, we should take a look at the company's total revenue to subtract any expenses associated with the company's doing business. After deducting taxes from that amount we will have the company's net income.

In the case in the income statement credits exceed debits, the net income of a company is likely to be positive.