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

Revenues and expenses are subcategories of which of the following financial statement elements?

Liabilities

Equity

Net Income

Assets

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Understand the structure of financial statements: Financial statements are composed of several key elements, including assets, liabilities, equity, revenues, and expenses.

Recognize that revenues and expenses are components of the Income Statement, which is used to calculate Net Income. Net Income is the result of subtracting expenses from revenues.

Identify the relationship between Net Income and Equity: Net Income contributes to the Retained Earnings portion of Equity. Retained Earnings are increased by Net Income and decreased by dividends paid to shareholders.

Clarify why revenues and expenses are not directly subcategories of assets, liabilities, or equity: Assets represent resources owned by the company, liabilities represent obligations, and equity represents the residual interest in the assets after deducting liabilities. Revenues and expenses are operational results that impact Net Income, which in turn affects equity.

Conclude that revenues and expenses are subcategories of Net Income, as they are the primary components used to calculate this financial statement element.