Which of the following is the correct order of preparation of financial statements?
A)income statement → statement of owner's equity → balance sheet → statement of cash flows
B)statement of owner's equity → balance sheet → income statement → statement of cash flows
C)balance sheet → statement of owner's equity → income statement → statement of cash flows
D)balance sheet → income statement → statement of owner's equity → statement of cash flows

Question

Quizplus · Accepted Answer

The correct order is: income statement, statement of owner's equity, balance sheet, and then statement of cash flows. This sequence ensures that the net income from the income statement is used to update the owner's equity, which is then reflected in the balance sheet, and finally, the cash flows are reported.

Which of the Following Is the Correct Order of Preparation