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 statements regarding financial statements is NOT correct?

The statement of changes in equity shows changes in owners' equity during the period.

The income statement reports revenues and expenses over a period of time.

The statement of cash flows only includes cash inflows from operating activities.

The balance sheet shows a company's financial position at a specific point in time.

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Verified step by step guidance

Step 1: Begin by understanding the purpose of each financial statement mentioned in the problem. The statement of changes in equity shows the changes in owners' equity during a specific period, including contributions, distributions, and retained earnings.

Step 2: Review the income statement, which reports revenues and expenses over a period of time, ultimately showing the net income or loss for that period.

Step 3: Examine the statement of cash flows, which provides information about cash inflows and outflows categorized into operating, investing, and financing activities. Note that it does not exclusively focus on operating activities; it includes all three categories.

Step 4: Analyze the balance sheet, which presents a snapshot of a company's financial position at a specific point in time, including assets, liabilities, and equity.

Step 5: Compare the statements and identify the incorrect statement. The statement of cash flows does not only include cash inflows from operating activities; it also includes cash flows from investing and financing activities.