Why should the income statement be prepared first?

a. The income statement does not have to be prepared first. Financial statements can be prepared in any order.
b. Net income from the income statement flows into the retained earnings statement. The ending retained earnings balance then flows into the balance sheet.
c. None of these answer choices are correct.
d. The statement of cash flows should be prepared first because it determines the sources of cash. That information is then used in preparing the income statement.

Answer rating: 100% (QA)

ANSWER b Net inme frm the inme sttement flws int the retined ernings sttement The ending retined ern... View the full answer