Which of the Following Is the Correct Order of Preparation

question 27

Multiple Choice

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

• A)income statement → statement of owner's equity → balance sheet → statement of cash flows
• B)statement of owner's equity → balance sheet → income statement → statement of cash flows
• C)balance sheet → statement of owner's equity → income statement → statement of cash flows
• D)balance sheet → income statement → statement of owner's equity → statement of cash flows

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders, and having the ability to own assets, sue, and be sued.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Service-Type Businesses

Companies that offer non-tangible products or services to customers rather than physical goods.

Legal Entity

An organization or individual that has legal rights and obligations, including the ability to enter into contracts, sue, and be sued.