Question

Rank the financial statements (Statement of Activities, Statement of Financial Position, Statement of Cash Flows, and Statement of Functional Expenses) in order of benefit to an administrator. Explain your reason for the order

Answer 1

The Order of Financial Staments is :

1. Statement of Financial Position -

Reason - The statement of finacial position states the organization's assets and liabilities in the liquidity order.

2. Statement of Activities

Reason - The statement of activities reports about the revenues and expenses as per the classification of net asset. This is the reason it is prepared by statement of financial position.

3. Statement of Functional Expense

Reason : The statement of functional expense reports about the expenses by their function and by their nature, hence to be prepared after statement of activities

4. Statement of Cash Flows

Reason : Cash Flow=s are recognized after taking into consideration all activities.