The income statement is always prepared first in order to determine
A) the total assets to be reported on the balance sheet.
B) the cash outflow of the company.
C) the profit or loss used in the statement of changes in owner's equity.
D) the amount of investments or withdrawals used in the statement of changes in owner's equity.

Question

Quizplus · Accepted Answer

The income statement is prepared first to determine the company's profit or loss, which is then used in the statement of changes in owner's equity to show how the profit or loss affected the owner's equity during the period.

The Income Statement Is Always Prepared First in Order to Determine