Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

Which of the following is a characteristic of all balance sheet accounts?

They carry their ending balances into the next accounting period.

They are closed to retained earnings at the end of the period.

They are reported on the income statement.

They only report revenues and expenses.

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Verified step by step guidance

Understand the nature of balance sheet accounts: Balance sheet accounts represent the financial position of a company at a specific point in time. They include assets, liabilities, and equity accounts.

Recognize the key characteristic of balance sheet accounts: Unlike income statement accounts, balance sheet accounts are not closed at the end of the accounting period. Instead, their ending balances are carried forward into the next accounting period.

Clarify why balance sheet accounts are not closed: Income statement accounts (revenues and expenses) are closed to retained earnings at the end of the period to calculate net income. Balance sheet accounts, however, remain open because they represent ongoing financial positions.

Eliminate incorrect options: Balance sheet accounts are not reported on the income statement, and they do not exclusively report revenues and expenses. These characteristics apply to income statement accounts, not balance sheet accounts.

Conclude the correct characteristic: The defining feature of balance sheet accounts is that they carry their ending balances into the next accounting period, reflecting the continuity of the company's financial position.