Which of the Following Financial Statements Is Generally Prepared First

question 47

Multiple Choice

Which of the following financial statements is generally prepared first?

• A) Income statement.
• B) Balance sheet.
• C) Statement of retained earnings.
• D) Statement of cash flows.

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Definitions:

Fair-value Hedge

A hedge of the exposure to changes in the fair value of an asset or liability or an unidentified firm commitment that could affect profit or loss.

Drilling Machine

A tool used for making holes in various materials, part of machinery equipment.

Forward Contract

A financial agreement between two parties to buy or sell an asset at a predetermined future date and price.

Cash-flow Hedge

A financial strategy used to manage risk associated with variability in cash flows due to changes in exchange rates, interest rates, or commodity prices, by using derivatives.