Why Should the Income Statement Be Prepared First

question 29

Multiple Choice

Why should the income statement be prepared first?

• A)The statement of cash flows should be prepared first because it determines the sources of cash.That information is then used in preparing the income statement.
• B)Net income from the income statement flows into the retained earnings statement.The ending retained earnings balance then flows into the balance sheet.
• C)The income statement does not have to be prepared first.Financial statements can be prepared in any order.
• D)None of these answer choices are correct.

Comprehend how social networks and reference groups function and influence individual behavior.

Recognize the transition and interaction between primary and secondary groups in social settings.

Identify factors contributing to group dynamics and how they shape relationships within primary and secondary groups.

Understand the concepts of in-groups, out-groups, and how loyalty and group identity are formed.

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Definitions:

Sale of Goods

A transaction between two parties where the seller transfers ownership of tangible personal property to a buyer for monetary compensation.

Assignee

An individual or entity to whom rights or interests have been transferred through a legal assignment.

Right to Buy

A legal entitlement or option allowing a person to purchase property or stock under specific conditions.

English Rule

A legal principle stating that the losing party in a lawsuit must pay the legal costs of the winning party.