Financial Statements Are Prepared in a Certain Sequence

question 8

Multiple Choice

Financial statements are prepared in a certain sequence.Which statement is prepared last?

• A) the adjusted trial balance
• B) the income statement
• C) the balance sheet
• D) the statement of cash flows

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Definitions:

Net Income

A company's overall earnings remaining after deducting all expenses, taxes, and costs from its total revenue.

Cash Dividends

A distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders.

Financing Activities

Activities that result in changes in the size and composition of the equity and borrowings of a company, reported in the cash flow statement.

Net Income

The net profit of a company following the deduction of all expenses and tax amounts from its total income.