Which of the following is the correct order for preparing financial statements?
A) Income statement, Statement of cash flows, Retained earnings statement, Balance sheet
B) Retained earnings statement, Income statement, Statement of cash flows, Balance sheet
C) Statement of cash flows, Retained earnings statement, Balance sheet, Income statement
D) Income statement, Retained earnings statement, Balance sheet, Statement of cash flows

Question

Quizplus · Accepted Answer

The generally accepted order for preparing financial statements is the following: first, the income statement which reports a company's revenues and expenses for a period of time; second, the retained earnings statement which shows changes in the company's retained earnings over the same period of time as the income statement; third, the balance sheet which shows the company's assets, liabilities, and equity as of a specific date; and finally, the statement of cash flows which reports on the company's cash inflows and outflows for the same period of time covered by the income statement and retained earnings statement. Therefore, the correct order is income statement, retained earnings statement, balance sheet, and statement of cash flows.

Which of the Following Is the Correct Order for Preparing