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

Financial statements are typically prepared in the following order:

Statement of Cash Flows, Balance Sheet, Income Statement, Statement of Retained Earnings

Statement of Retained Earnings, Income Statement, Statement of Cash Flows, Balance Sheet

Balance Sheet, Income Statement, Statement of Retained Earnings, Statement of Cash Flows

Income Statement, Statement of Retained Earnings, Balance Sheet, Statement of Cash Flows

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Verified step by step guidance

Understand the purpose of each financial statement: The Income Statement shows the company's revenues and expenses, leading to net income. The Statement of Retained Earnings explains changes in retained earnings, including net income and dividends. The Balance Sheet provides a snapshot of the company's financial position at a specific point in time. The Statement of Cash Flows details cash inflows and outflows from operating, investing, and financing activities.

Recognize the logical sequence: The Income Statement is prepared first because it calculates net income, which is needed for the Statement of Retained Earnings. The Statement of Retained Earnings uses net income to determine the ending retained earnings balance, which is then reported on the Balance Sheet.

Note the interconnection: The Balance Sheet requires the ending retained earnings balance from the Statement of Retained Earnings to complete the equity section. Once the Balance Sheet is prepared, the Statement of Cash Flows can be finalized, as it reconciles the changes in cash from the beginning to the end of the period.

Apply the correct order: The sequence is Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows. This order ensures that the necessary information flows logically from one statement to the next.

Review the reasoning: Preparing financial statements in this order ensures accuracy and consistency, as each statement builds upon the information provided by the previous one. This systematic approach is essential for proper financial reporting.