Which of the following represents the proper sequence for preparing the financial statements?
A)balance sheet, statement of owner's equity, income statement
B)income statement, balance sheet, statement of owner's equity
C)statement of owner's equity, income statement, balance sheet
D)income statement, statement of owner's equity, balance sheet

Question

Quizplus · Accepted Answer

The proper sequence for preparing the financial statements is income statement, statement of owner's equity, and then balance sheet. This is because the income statement shows the company's revenue and expenses, which are used in calculating the net income or loss. The statement of owner's equity shows changes in the owner's equity account, such as investments and withdrawals, as well as the net income or loss from the income statement. Finally, the balance sheet shows the assets, liabilities, and owner's equity of the company at a specific point in time, using information from the other two statements.

Which of the Following Represents the Proper Sequence for Preparing