Financial statements are typically prepared in the following order:
A)Balance sheet,statement of retained earnings,income statement.
B)Statement of retained earnings,balance sheet,income statement.
C)Income statement,balance sheet,statement of retained earnings.
D)Income statement,statement of retained earnings,balance sheet.
E)Balance sheet,income statement,statement of retained earnings..

Question

Quizplus · Accepted Answer

The income statement calculates net income for a given period, followed by the statement of retained earnings, which shows changes in retained earnings during that period. Finally, the balance sheet presents a snapshot of a company's financial position on a specific date, which includes its assets, liabilities, and equity. The order of financial statements reflects the logical flow of information in terms of calculating and presenting financial performance and position.

Financial Statements Are Typically Prepared in the Following Order