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

A company provides services to a client on account. Which account(s) in the income statement would increase as a result of this transaction?

Service Revenue

Accounts Receivable

Cash

Retained Earnings

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Verified step by step guidance

Understand the nature of the transaction: The company is providing services to a client on account, meaning the client has not paid cash immediately but owes the company for the services rendered.

Identify the accounts affected: Since the company is earning revenue from providing services, the 'Service Revenue' account in the income statement will increase. Additionally, the 'Accounts Receivable' account in the balance sheet will increase because the client owes money.

Relate the transaction to the accounting equation: The increase in 'Service Revenue' contributes to net income, which ultimately increases 'Retained Earnings' in the equity section of the balance sheet.

Clarify why 'Cash' is not affected: In this transaction, no cash is received immediately. Therefore, the 'Cash' account remains unchanged until the client pays the amount owed.

Summarize the impact: The transaction increases 'Service Revenue' in the income statement, 'Accounts Receivable' in the balance sheet, and 'Retained Earnings' in the equity section of the balance sheet.