Items Common to Income Statement and Statement of Changes in Equity

Steps:

• Identify income statement components: revenues, expenses, and profit for the year.
• Identify statement of changes in equity components: opening equity, profit for the year, dividends, and reserves.
• Compare options: check which appear in both statements per IFRS/GAAP standards.
• Select the match: profit for the year links net income to equity changes.

Why C is correct:

• Profit for the year is the bottom-line net income in the income statement (per IAS 1) and added to retained earnings in the statement of changes in equity.

Why the others are wrong:

• A: Accrued interest is an expense in the income statement but not reported in changes in equity.
• B: Ordinary share dividend paid is a deduction in changes in equity but excluded from the income statement as profit appropriation.
• D: Transfer to general reserve is an internal equity movement in changes in equity but absent from the income statement.

Final answer: C