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

In what order are the four primary financial statements typically prepared by a company at the end of an accounting period?

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

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

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Verified step by step guidance

Understand the purpose of each financial statement: The Income Statement summarizes revenues and expenses to determine net income or loss. 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. 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.

Next, prepare the Balance Sheet: The ending retained earnings balance from the Statement of Retained Earnings is included in the equity section of the Balance Sheet. This ensures the Balance Sheet reflects the updated equity position.

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

Remember the correct order: Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows. This sequence ensures all necessary information flows logically between the statements.