Which of the following statements is incorrect regarding preparing financial statements?

a. The adjusted trial balance is the primary source of information needed to prepare the financial statements.

b. The financial statements are prepared in the following order: (1) the income statement; (2) the statement of retained earnings; (3) the balance sheet.

c. The adjusted trial balance lists only the balance sheet accounts in a ‘‘debit’’ and

‘‘credit’’ format.

d. The income statement and the balance sheet are related through the retained earnings account.