Discussion
Which of the financial statement gets prepared first ?
Answer: A
The statement prepared first is the income statement.
The income statement (profit and loss account) works out the net profit or loss for the period. That figure is needed for everything that follows:
- Income statement: gives net profit.
- Statement of retained earnings: adds net profit to opening retained earnings and deducts dividends.
- Balance sheet: carries the closing retained earnings into equity.
- Cash flow statement: uses profit and the balance sheet changes.
So the balance sheet and the cash flow statement cannot be completed before the income statement.
No comment is present. Be the first to comment.
Loading…
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development