Financial statements are prepared in a certain sequence.Which statement is prepared first?
A)The adjusted trial balance.
B)The income statement.
C)The balance sheet.
D)The statement of cash flows.

Question

Quizplus · Accepted Answer

The income statement is prepared first because it calculates the net income or loss for the period, which is then used in preparing the other financial statements, such as the retained earnings statement (if applicable), and the balance sheet.

Financial Statements Are Prepared in a Certain Sequence