The statement of retained earnings should be prepared
A) before the income statement and after the balance sheet
B) before the income statement and balance sheet
C) after the income statement and balance sheet
D) after the income statement and before the balance sheet

Question

Quizplus · Accepted Answer

The statement of retained earnings follows the income statement, as it reconciles the net income from the income statement with the changes in retained earnings. It is then followed by the balance sheet, which includes the ending retained earnings balance reported on the statement of retained earnings. Therefore, the correct order is income statement > statement of retained earnings > balance sheet.

The Statement of Retained Earnings Should Be Prepared