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 is typically the first financial statement to be prepared during the accounting cycle?

Income Statement

Statement of Cash Flows

Balance Sheet

Statement of Retained Earnings

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Verified step by step guidance

Understand the accounting cycle: The accounting cycle is a series of steps that organizations follow to record and report financial transactions. It typically ends with the preparation of financial statements.

Identify the sequence of financial statements: Financial statements are prepared in a specific order because the information from one statement is often used in the preparation of another. The typical order is: Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows.

Recognize the role of the Income Statement: The Income Statement is prepared first because it reports the company's revenues and expenses, which are necessary to calculate net income. Net income is then used in the Statement of Retained Earnings.

Understand the connection between statements: The net income from the Income Statement flows into the Statement of Retained Earnings, which calculates the ending retained earnings balance. This balance is then used in the Balance Sheet.

Conclude why the Income Statement is first: Since the Income Statement provides the foundational data (net income) required for subsequent financial statements, it is typically the first financial statement prepared during the accounting cycle.