The CORRECT data flow from one financial statement to the next is:
A)statement of retained earnings,income statement,balance sheet,statement of cash flows.
B)balance sheet,statement of retained earnings,income statement,statement of cash flows.
C)statement of retained earnings,income statement,statement of cash flows,balance sheet.
D)income statement,statement of retained earnings,balance sheet,statement of cash flows.

Question

Quizplus · Accepted Answer

The correct sequence starts with the income statement, which determines the net income or loss. This figure is then used in the statement of retained earnings to adjust the beginning retained earnings balance. The adjusted retained earnings are incorporated into the equity section of the balance sheet. Finally, the balance sheet changes help to prepare the statement of cash flows.

The CORRECT Data Flow from One Financial Statement to the Next