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 is the correct order for preparing the basic financial statements?

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

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

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

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

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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.

Understand the relationship between the Balance Sheet and the Statement of Cash Flows: The Balance Sheet provides information about the company's assets, liabilities, and equity, which are used to prepare the Statement of Cash Flows. The Statement of Cash Flows explains changes in cash balances reported on the Balance Sheet.

Identify the correct order: Based on the dependencies between the statements, the correct order is: Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows.

Apply this sequence consistently: When preparing financial statements, always follow this order to ensure accuracy and logical flow of information between the statements.