Most firms prefer to prepare the statement of cash flows after they have prepared the income statement and the balance sheet.The amounts debited to various accounts on the T-account work sheet
A)do not equal amounts credited to various accounts.
B)must equal amounts credited to the liability accounts, only.
C)may or may not equal amounts credited to various accounts.
D)must equal amounts credited to various accounts.
E)must equal amounts credited to the shareholders' equity accounts, only.

Question

Quizplus · Accepted Answer

In accounting, the principle of double-entry bookkeeping requires that debits and credits in the ledger must always balance, meaning the total amount debited across all accounts must equal the total amount credited. This principle ensures the accounting equation remains balanced.

Most Firms Prefer to Prepare the Statement of Cash Flows