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:

Credit Sale

A transaction where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Record Keeping

The practice of maintaining and preserving documents, files, and records related to financial transactions for future reference.

Credit Terms

The conditions under which credit is extended by a seller to a buyer, including payment deadlines and any possible discounts for early payment.

General Journal Entries

Entries made in the general journal to record financial transactions in the accounting system.