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 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

Step 1: Understand the purpose of each financial statement. The Income Statement summarizes revenues and expenses to determine net income or loss for a period. The Statement of Retained Earnings shows changes in retained earnings, including net income and dividends. The Balance Sheet provides a snapshot of assets, liabilities, and equity at a specific point in time. The Statement of Cash Flows details cash inflows and outflows from operating, investing, and financing activities.

Step 2: Recognize the logical sequence for preparing financial statements. The Income Statement is prepared first because it calculates net income, which is needed for the Statement of Retained Earnings.

Step 3: Prepare the Statement of Retained Earnings next. This statement uses the net income from the Income Statement to update retained earnings, factoring in dividends paid during the period.

Step 4: Use the updated retained earnings figure to complete the Balance Sheet. The Balance Sheet requires accurate equity information, which includes retained earnings.

Step 5: Finally, prepare the Statement of Cash Flows. This statement uses information from the Balance Sheet and Income Statement to classify cash transactions into operating, investing, and financing activities.