The financial statements should be prepared in this order: 1)income statement,2)balance sheet and 3)statement of changes in equity.

Question

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The correct order is: 1) income statement, 2) statement of changes in equity, and 3) balance sheet. The income statement is prepared first to determine net income, which is then used in the statement of changes in equity to calculate ending equity, which is needed for the balance sheet.

The Financial Statements Should Be Prepared in This Order: 1)income