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

Stockholders’ equity consists of which of the following?

Cash and accounts receivable

Revenues and expenses

Common stock and retained earnings

Assets and liabilities

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Verified step by step guidance

Understand the concept of stockholders' equity: Stockholders' equity represents the owners' claim to the assets of a corporation after all liabilities have been paid. It is a key component of the accounting equation: Assets = Liabilities + Stockholders' Equity.

Identify the components of stockholders' equity: Stockholders' equity typically consists of common stock, preferred stock (if applicable), additional paid-in capital, retained earnings, and sometimes treasury stock (which reduces equity).

Eliminate incorrect options: Cash and accounts receivable are classified as assets, not equity. Revenues and expenses are part of the income statement and contribute to retained earnings but are not directly part of stockholders' equity. Assets and liabilities are separate components of the accounting equation and do not represent equity.

Focus on the correct components: Common stock represents the ownership interest of shareholders, and retained earnings reflect the cumulative net income retained by the company after dividends are paid. These are the primary components of stockholders' equity.

Conclude with the correct answer: Stockholders' equity consists of common stock and retained earnings, as these represent the ownership interest and accumulated profits of the shareholders.