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

When should the balance sheet be prepared in the accounting cycle?

After the income statement and statement of retained earnings are prepared

Only at the beginning of the accounting period

Before any other financial statements are prepared

Whenever cash is received or paid

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Verified step by step guidance

Understand the purpose of the balance sheet: The balance sheet provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity.

Review the sequence of financial statement preparation: In the accounting cycle, the income statement is prepared first to determine the net income or loss for the period. This is because the net income or loss is needed to update the retained earnings in the statement of retained earnings.

Recognize the relationship between the financial statements: The statement of retained earnings uses the net income (or loss) from the income statement to calculate the ending retained earnings balance. This ending retained earnings balance is then reported in the equity section of the balance sheet.

Determine the correct timing for the balance sheet: Since the balance sheet relies on the updated retained earnings figure, it must be prepared after the income statement and the statement of retained earnings are completed.

Eliminate incorrect options: The balance sheet is not prepared only at the beginning of the accounting period, nor is it prepared before other financial statements. It is also not prepared whenever cash is received or paid, as it is a periodic financial statement prepared at the end of an accounting period.