The Natural Progression in Items from One Statement to Another

question 41

Multiple Choice

The natural progression in items from one statement to another and preparation of financial statements is best represented by the following order:

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

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Definitions:

Veil of Ignorance

Concept from Rawls’ "A Theory of Justice" suggesting decision-makers should make societal rules as if they were ignorant of their own status in society to ensure fairness.

Principles of Justice

Fundamental norms or rules that guide the distribution of burdens and benefits in a society fairly and equitably.

Advantage

A condition or circumstance that puts one in a favorable or superior position relative to others.

Moral People

Individuals who act in ways that are considered ethically right and good, often guided by personal conscience and societal norms.