Question

1) In the steps to compile financial statements, explain a few accounts that are more likely to be used to link these financial statements.

Answer 1

* Net income from the income statement flows to the balance sheet and cash flow statement
* Depreciation is added back and CapEx is deducted on the cash flow statement, which determines PP&E on the balance sheet
*Financing activities mostly affect the balance sheet and cash from finalizing, except for interest, which is shown on the income statement
*The sum of the last period’s closing cash balance plus this periods cash from operations, investing, and financing is the closing cash balance on the balance sheet.

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