a The equation "Ending balance in retained earnings = Beginning balance in retained earnings + Net operating incomeDividends" highlights the connection between the balance sheet and income statement and recognizes the fact that netoperating income is essentially embedded within retained earnings on the balance sheet. Which of the following is true?1. Factory depreciation is recorded as a decrease in the Property, Plant, and Equipment column and as a decrease in theRetained Earnings column.2. Factory utility costs paid in cash are recorded as a decrease in the Cash column and as an increase in the ManufacturingOverhead column.Both statements are true.Only statement I is true.Only statement II is true.Neither of the statements are true.

Financial reports that organizations produce near the end of an accounting period include the…

The equation "Ending balance in retained earnings = Beginning balance in retained earnings + Net operating income - Dividends" highlights the connection between the balance sheet and income statement and recognizes the fact that net operating income is essentially embedded within retained earnings on the balance sheet. Which of the following is true? O 1. Factory depreciation is recorded as a decrease in the Property, Plant, and Equipment column and as a decrease in the Retained Earnings column. 2. Factory utility costs paid in cash are recorded as a decrease in the Cash column and as an increase in the Manufacturing Overhead column. Both statements are true. Only statement I is true. Only statement II is true. Neither of the statements are true.