Accounting Cycle Step 7: Statement of Retained Earnings

Preparing financial statements is the 7th step in the accounting cycle. The information comes from the adjusted trial balance. The financial statements are prepared in the following order: 1) Income Statement, 2) Statement of Retained Earnings (or Statement of Owner's Equity for sole-proprietorship business, 3) Classified Balance Sheet, and 4) Statement of Cash Flows, although this is rarely prepared in a beginning financial accounting course as students haven't learned enough yet to properly prepare one. This video shows how to prepare a Statement of Retained Earnings. ‪@ProfAlldredge‬ For best viewing, switch to 1080p