Which of the following statements is true?
A) The statement of financial position/balance sheet,the income statement and the statement of cash flows are totally linked.
B) There are links only between the statement of financial position/balance sheet and statement of cash flows.
C) There is no link between the statement of financial position/balance sheet,the income statement and the statement of cash flows.
D) There are links only between the income statement and the statement of cash flows.

Question

Quizplus · Accepted Answer

The statement of financial position/balance sheet, the income statement and the statement of cash flows are all connected and linked to one another. The statement of financial position/balance sheet provides information on a company's assets, liabilities and equity, which are reflected in the income statement and the statement of cash flows. The income statement shows a company's revenue, expenses and net income, which are used to calculate cash flows in the statement of cash flows. Therefore, all three financial statements are interrelated and dependent on each other.

Which of the Following Statements Is True