Question

Which of the following is incorrect with respect to financial statement articulation?

A)	Preparation of the balance sheet provides the data needed to prepare the statement of cash flows.

B)	Preparation of the income statement and statement of comprehensive income provides the necessary data needed to balance the balance sheet.

C)	Preparation of the statement of cash flows requires information from the income statement and the balance sheet.

D)	Preparation of the statement of shareholders' equity provides the data needed to complete the income statement.

Answer 1

C) Preparation of the statement of cashflows requires information from the income statement and he balancesheet

Interest income , income tax paid , interest expense etc cannot be derived just from balancesheet. So , Balancesheet alone is not useful to make cashflow satement.

For preparing balancesheet ,income and comprehensive income statements are not enough.It requires Trial balance aiso.

Statement of shareholder's equity will no give informaion to prepare income staement , it provides only he net income balance