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

4. Merchandising Operations

Single-step Income Statement

Financial Accounting

4. Merchandising Operations

Single-step Income Statement

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Multiple Choice

Which financial statement shows how well a company performed over the past year?

Statement of Cash Flows

Statement of Changes in Equity

Balance Sheet

Income Statement

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Verified step by step guidance

Understand the purpose of each financial statement: The Statement of Cash Flows shows the inflows and outflows of cash, the Statement of Changes in Equity tracks changes in ownership equity, the Balance Sheet provides a snapshot of the company's financial position at a specific point in time, and the Income Statement summarizes the company's revenues and expenses over a period.

Recognize that the Income Statement is specifically designed to measure a company's performance over a period, typically a year, by showing its revenues, expenses, and resulting net income or loss.

Recall that the Income Statement is also referred to as the Profit and Loss Statement, emphasizing its role in evaluating profitability.

Understand that the Income Statement includes key components such as revenue, cost of goods sold, gross profit, operating expenses, and net income, which collectively provide insights into the company's operational efficiency and financial success.

Conclude that the Income Statement is the correct financial statement to analyze how well a company performed over the past year, as it directly reflects the company's financial results for the specified period.