Discussion topic

Financial statements are prepared using which basis of Accounting and why? Explain.

Financial statements are prepared using which basis of Accounting and why? Explain.

by Syed Istiak Ahmed -
Number of replies: 0

Financial statements are how companies communicate their story. Thanks to GAAP, there are four basic financial statements everyone must prepare . There are several accounting activities that happen before financial statements are prepared. Financial statements are prepared in the following order:


Income Statement

Statement of Retained Earnings – also called Statement of Owners’ Equity

The Balance Sheet

The Statement of Cash Flows