What financial statement helps to connect the income statement to the balance sheet?

The statement that helps to connect the income statement to the balance sheet is the statement of changes in owners' equity. This statement provides a detailed account of the changes in equity during a specific period, incorporating elements from the income statement, such as net income or loss, which affects retained earnings. Additionally, it reflects transactions such as dividends distributed to owners and impacts from capital contributions or withdrawals.

By linking the income statement and the balance sheet, the statement of changes in owners' equity shows how net income from the income statement increases or decreases the equity reported on the balance sheet. This connection is crucial for understanding how profits generated during a specific period translate into adjustments in the owners' equity section of the balance sheet, providing a comprehensive view of a company's financial position over time.