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The balance sheet should be prepared a.before the income statement and after the statement of stockholders’ equity b.before the income statement and the statement of stockholders’ equity c.after the income statement and before the statement of stockholders’ equity d.after the income statement and the statement of stockholders’ equity

Respuesta :

Answer:

d.after the income statement and the statement of stockholders’ equity

Explanation:

In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

The statement of stockholder's equity comprises common stock and retained earnings. The ending balance after adjustment shown in the attached spreadsheet.  

And, the balance sheet comprises of the assets and liabilities. With the help of the accounting equation, the total assets are equal to the total liabilities including stockholder's equity.

Thus, option d is right.

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