when preparing the financial statements, why is the income statement prepared first?\na. the income…

when preparing the financial statements, why is the income statement prepared first?\na. the income statement is used to prepare the balance sheet.\nb. net income or net loss from the income statement is used for the statement of retained earnings.\nc. the income statement is the easiest statement to prepare.\nd. the income statement is the most important statement to investors and creditors.

when preparing the financial statements, why is the income statement prepared first?\na. the income statement is used to prepare the balance sheet.\nb. net income or net loss from the income statement is used for the statement of retained earnings.\nc. the income statement is the easiest statement to prepare.\nd. the income statement is the most important statement to investors and creditors.

Answer

Brief Explanations:

The net - income or net - loss figure from the income statement is a key input for calculating the ending retained earnings balance in the statement of retained earnings. This figure is then used in preparing the balance sheet. So, the income statement is prepared first to provide this crucial data.

Answer:

B. Net income or net loss from the income statement is used for the statement of retained earnings.