The income statement is prepared first so the information can be used to prepare the statement of owner's equity.

Question

Quizplus · Accepted Answer

The income statement provides information on the company's revenue, expenses, and net income, which is used to calculate the change in owner's equity from the beginning to the end of the accounting period. Therefore, the income statement is prepared first and then used to prepare the statement of owner's equity.

The Income Statement Is Prepared First So the Information Can