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 would be included in a business's income statement?

Cash balance at year-end

Revenue from sales

Owner's equity

Total assets

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Verified step by step guidance

Understand the purpose of an income statement: It is a financial report that shows a business's revenues, expenses, and net income or loss over a specific period. It does not include items like cash balance, owner's equity, or total assets, which are part of other financial statements such as the balance sheet.

Identify the correct category: Revenue from sales is a key component of the income statement because it represents the income generated from the primary operations of the business during the reporting period.

Clarify why other options are excluded: Cash balance at year-end is part of the balance sheet under assets, owner's equity is part of the equity section of the balance sheet, and total assets are also part of the balance sheet under assets. These items are not related to the income statement.

Focus on the structure of the income statement: The income statement typically includes revenues (like sales revenue), expenses (like cost of goods sold and operating expenses), and calculates net income or loss by subtracting expenses from revenues.

Conclude with the correct answer: Revenue from sales is included in the income statement because it directly contributes to the calculation of net income or loss for the business during the reporting period.