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 of the following financial statements includes a line item labeled as 'Net Income'?

Single-step Income Statement

Statement of Retained Earnings

Statement of Cash Flows

Balance Sheet

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Understand the concept of 'Net Income': Net Income represents the company's total earnings or profit after deducting all expenses, taxes, and costs from its total revenue. It is a key figure in financial accounting and is reported on specific financial statements.

Identify the financial statement that directly reports 'Net Income': The Single-step Income Statement is designed to show the company's revenues and expenses, culminating in the calculation of Net Income. This is the primary statement where Net Income is explicitly labeled.

Explore the Statement of Retained Earnings: This statement starts with the beginning retained earnings balance, adds Net Income (from the Income Statement), subtracts dividends, and calculates the ending retained earnings balance. While Net Income is included, it is not the primary focus of this statement.

Analyze the Statement of Cash Flows: This statement reports cash inflows and outflows from operating, investing, and financing activities. It does not include a line item labeled 'Net Income,' although Net Income may influence the operating activities section.

Review the Balance Sheet: The Balance Sheet provides a snapshot of a company's financial position, listing assets, liabilities, and equity. It does not include a line item labeled 'Net Income,' as Net Income is part of the equity section through retained earnings.