List the Order in Which the Balance Sheet, Statement of Retained

question 82

Essay

List the order in which the balance sheet, statement of retained earnings, and income statement are prepared. Briefly discuss why this order is necessary.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Accounts Payable

Liabilities owed by a business to its creditors for goods and services received, but not yet paid for.

Notes Payable

A financial accounting term that represents a written promise to pay a certain amount of money, typically with interest, on or before a specified date.

Profitability Ratios

Measures of a company’s overall financial performance by evaluating its ability to generate revenues in excess of expenses.