Recall the order in which financial statements are prepared.
Understand the Problem
The question is asking for the sequence or order in which the main financial statements are prepared in accounting. This typically includes the income statement, statement of retained earnings, balance sheet, and cash flow statement.
Answer
Income Statement, Statement of Retained Earnings, Balance Sheet, Statement of Cash Flows
The final answer is Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows
Answer for screen readers
The final answer is Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows
More Information
Financial statements are typically prepared in this order to ensure the proper flow of information: the income statement provides the profitability, which affects the statement of retained earnings; the retained earnings affect the balance sheet; and the cash flows statement shows the cash movement and liquidity.
Tips
Often, people confuse the order of the balance sheet and cash flow statement. Always remember that liquidity shown in the cash flow statement comes last.
Sources
- Solved Recall the order in which financial statements are | Chegg.com - chegg.com
- The financial statements should be prepared in what order? A ... - homework.study.com
