Why Does an Accountant Prepare the Income Statement First

question 33

Multiple Choice

Why does an accountant prepare the income statement first?

• A) Net income must be computed first to properly complete the other financial statements.
• B) It is easier to adjust income statement accounts first than it is to adjust balance sheet accounts.
• C) Management, being profit oriented, is more interested in the company's net income than in the assets the company owns and the debts it owes.
• D) There is no particular order in which financial statements must be prepared.

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Definitions:

Mindfulness

A mental practice of focusing one's awareness on the present moment while calmly acknowledging and accepting one's feelings, thoughts, and bodily sensations.

ACT Methods

Techniques and practices derived from Acceptance and Commitment Therapy, focusing on accepting negative thoughts without judgment and committing to actions that align with one's values.

Experiential Avoidance

A mental phenomenon in which people try to steer clear of thoughts, emotions, memories, and bodily sensations that cause them internal discomfort.

Mindfulness

A mental state achieved by focusing one's awareness on the present moment, while calmly acknowledging and accepting one's feelings, thoughts, and bodily sensations, used as a therapeutic technique.