Which of the following is the correct order of preparation of financial statements?

Question

Quizplus · Accepted Answer

The correct order of preparation of financial statements starts with the income statement, which calculates the net income or loss. This figure is then used in the statement of owner's equity to adjust the owner's capital account for the period. The adjusted capital figure is required for the balance sheet, which shows the company's financial position at a point in time. Finally, the statement of cash flows uses information from the other financial statements to show how cash has been generated and used during the period.

Which of the Following Is the Correct Order of Preparation