Accountıng I Deneme Sınavı Sorusu #1313739
What is the order of preparation for financial statements?
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Income statement, presents the revenues, expenses, and profits/losses generated during the reporting period.
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Financial statements are prepared in order;
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Business's financial statements are the income statement and the statement of retained earnings. |
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Begining preparing your financial report by balancing your company's financial holdings and create a statement of the company's income. |
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Begininig the report with an accounting of the amount of cash the company has brought in or spent. |
For the preparation of financial statements, the starting point is the adjusted trial balance. As you can remember from the previous chapters, adjusted trial balance is one form of trial balance that holds in-term transactions’ totals and balances as well as the end of the period transactions’ totals and balances for final checking of the accounts and preparation of financial statements. After the preparation of adjusted trial balance and financial statements, closing entries will be recorded in order to get accounts ready for the next year. We will focus on closing process further in this chapter. Now, let’s have a look at the financial statements. Financial statements are prepared in order;
- Income statement
- Statement of owner’s equity
- Balance sheet
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