The order in which financial statements should be prepared is
A) balance sheet,income statement,statement of owner's equity.
B) income statement,balance sheet,statement of owner's equity.
C) statement of owner's equity,balance sheet,income statement.
D) income statement,statement of owner's equity,balance sheet.

Question

Quizplus · Accepted Answer

The correct order for preparing financial statements is to start with the income statement, which shows the company's revenues and expenses. Next, the statement of owner's equity is prepared, which reflects changes in the owner's capital account during the period. Finally, the balance sheet is prepared, which presents the company's financial position at a point in time, using information from the previous two statements.

The Order in Which Financial Statements Should Be Prepared Is