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 best describes the information reported in the income statement?

It reports a company's revenues and expenses over a specific period, showing net income or loss.

It shows the inflows and outflows of cash during a period.

It details changes in shareholders' equity over a period.

It lists a company's assets, liabilities, and equity at a specific point in time.

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Verified step by step guidance

Step 1: Understand the purpose of an income statement. The income statement is a financial report that provides information about a company's revenues and expenses over a specific period, ultimately showing the net income or net loss for that period.

Step 2: Compare the descriptions provided in the options with the purpose of the income statement. The correct description should align with the definition of the income statement as a report of revenues, expenses, and net income or loss over a specific period.

Step 3: Eliminate options that describe other financial statements. For example, the option 'It shows the inflows and outflows of cash during a period' refers to the cash flow statement, not the income statement.

Step 4: Similarly, eliminate the option 'It details changes in shareholders' equity over a period,' as this refers to the statement of changes in equity.

Step 5: Finally, eliminate the option 'It lists a company's assets, liabilities, and equity at a specific point in time,' as this describes the balance sheet. The remaining option that matches the purpose of the income statement is the correct answer.