Question

The order in which the financial statements are prepared is:

Multiple Choice

balance sheet, statement of cash flows, statement of retained earnings, income statement.

income statement, balance sheet, statement of retained earnings, statement of cash flows.

balance sheet, Income statement, statement of retained earnings, statement of cash flows.

income statement, statement of retained earnings, balance sheet, statement of cash flows.

Net income appears on which of the following financial statements?

Multiple Choice

income statement and statement of retained earnings

Balance sheet and statement of retained earnings.

Balance sheet and income statement

Balance sheet and statement of cash flows.

Which of the following would not be reported as an asset on the balance sheet?

Multiple Choice

Supplies

Retained Earnings

Casti

Accounts Receivable

The income statement reports:

Multiple Choice

the amount of profit distributed to owners during the period.

cumulative earnings that have not been distributed to stockholders.

the amount of revenues earned and expenses incurred during the period.

the assets, liabilities, and stockholders' equity of a company.

Answer 1

1) Order of financial statements is - Income statement, statement of Retained Earnings, Balance Sheet, Statement of cash flows.

The above is the order of financial statements and the order can't be as mentioned in other options.

2)Net Income appears in Balance Sheet and Statement of Cash flows.

Net Income appears in Balance sheet via statement of Retained Earnings and in statement of cashflows statement (as part of Operating activity). Net Income is a resultant figure of Income statement and appears in Balance sheet and Income statement.

3) Option - Retained Earnings is not an asset and it's not reported under Assets but its reported as part of Shareholders funds. Supplies, Cash & Account Receivable are current assets.

4)The Income statement reports - the amount of revenues earned and expenses incurred during the period.

The amount of cash received in the form of revenues and the amount of cash paid (in the form of expenses). Other options are wrong.

If you have any doubts please comment on the answer.