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

Based on the following table showing the assets and liabilities of the Smith family in 2005 and 2009, which financial statement would best summarize the family's financial position at each of these dates?

Statement of Retained Earnings

Statement of Cash Flows

Balance Sheet

Income Statement

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Verified step by step guidance

Understand the purpose of each financial statement mentioned in the problem: The Balance Sheet summarizes the financial position of an entity at a specific point in time by listing its assets, liabilities, and equity. The Statement of Retained Earnings shows changes in retained earnings over a period. The Statement of Cash Flows details cash inflows and outflows during a period. The Income Statement reports revenues and expenses over a period to determine net income.

Identify the key elements in the problem: The table provided shows assets and liabilities of the Smith family at two specific dates (2005 and 2009). These elements are directly related to the Balance Sheet, which focuses on assets, liabilities, and equity at a specific point in time.

Recognize that the Balance Sheet is the most appropriate financial statement to summarize the family's financial position at each of these dates because it provides a snapshot of what the family owns (assets) and owes (liabilities) at a given moment.

Note that other financial statements, such as the Statement of Retained Earnings, Statement of Cash Flows, and Income Statement, are not designed to summarize financial position at a specific date. They focus on changes or performance over a period of time.

Conclude that the Balance Sheet is the correct answer because it aligns with the requirement to summarize the family's financial position at specific dates (2005 and 2009).