Which of the following choices shows the correct sequence of the order of preparation of the financial statements?
A) balance sheet, statement of net income, statement of stockholders' equity, statement of cash flows
B) statement of net income, statement of stockholders' equity, balance sheet, statement of cash flows
C) statement of net income, balance sheet, statement of stockholders' equity, statement of cash flows
D) statement of stockholders' equity, balance sheet, statement of net income, statement of cash flows

Question

Quizplus · Accepted Answer

The correct sequence is: statement of net income, statement of stockholders' equity, balance sheet, and statement of cash flows. The net income is needed to prepare the statement of stockholders' equity, which in turn is needed for the balance sheet. The statement of cash flows is typically prepared last.

Which of the Following Choices Shows the Correct Sequence of the Order