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

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Dave examines the ______ when he wants to know the value of his company’s assets and liabilities.

statement of retained earnings

statement of cash flows

income statement

balance sheet

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Verified step by step guidance

Understand the purpose of the balance sheet: The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the company's assets, liabilities, and equity.

Recognize the components of the balance sheet: Assets represent what the company owns, liabilities represent what the company owes, and equity represents the residual interest of the owners after liabilities are subtracted from assets.

Compare the balance sheet to other financial statements: The statement of retained earnings shows changes in retained earnings, the statement of cash flows tracks cash inflows and outflows, and the income statement reports revenues and expenses over a period. None of these provide a direct snapshot of assets and liabilities like the balance sheet does.

Identify the relevance of the balance sheet for Dave: When Dave wants to know the value of his company’s assets and liabilities, the balance sheet is the correct financial statement to examine because it directly lists these values.

Conclude that the balance sheet is the correct answer: Based on the explanation above, the balance sheet is the financial statement Dave should refer to for understanding the value of his company’s assets and liabilities.