Which of the following statements is correct in regards to the order of preparing financial statements?
A) Income statement, Balance sheet, Statement of changes in owner's equity, Cash flow statement
B) Balance sheet, Income statement, Cash flow statement, Statement of changes in owner's equity
C) Income statement, Statement of changes in owner's equity, Balance sheet, Cash flow statement
D) Income statement, Statement of changes in owner's equity, Cash flow statement, Balance sheet

Question

Quizplus · Accepted Answer

The correct order for preparing financial statements is: Income statement (to determine net income or loss), Statement of changes in owner's equity (to update the equity section with the net income or loss and any owner's investments or withdrawals), Balance sheet (to present the financial position using updated equity), and finally, Cash flow statement (to show how changes in the balance sheet and income statement affect cash and cash equivalents).

Which of the Following Statements Is Correct in Regards to the Order