The income statement must be prepared before the statement of owner's equity since net income or net loss is added to or subtracted from the beginning balance in the owner's capital account.

Question

Quizplus · Accepted Answer

The income statement is prepared before the statement of owner's equity because it provides the net income or net loss figure, which is necessary to calculate the ending balance in the owner's equity.

The Income Statement Must Be Prepared Before the Statement of Owner's