The financial statements should be prepared in what order?
A)Income statement, statement of owner's equity, balance sheet, statement of cash flows
B)Statement of owner's equity, balance sheet, income statement, statement of cash flows
C)Balance sheet, statement of owner's equity, income statement, statement of cash flows
D)Balance sheet, income statement, statement of owner's equity, statement of cash flows

Question

Quizplus · Accepted Answer

The correct order for preparing financial statements is: Income statement, statement of owner's equity, balance sheet, and statement of cash flows. This sequence allows for the proper flow of information, where the net income or loss from the income statement is used to adjust the owner's equity in the statement of owner's equity, which in turn is used in the balance sheet, and finally, the cash flows statement is prepared to detail the cash movements during the period.

The Financial Statements Should Be Prepared in What Order