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

The accounting cycle is a six-step process that results in which of the following?

The preparation of financial statements

The calculation of tax liabilities

The approval of audit reports

The creation of a company budget

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Verified step by step guidance

Step 1: Understand the accounting cycle. The accounting cycle is a systematic process used by businesses to record and manage financial transactions. It typically includes steps such as identifying transactions, recording them in journals, posting to ledgers, preparing trial balances, adjusting entries, and creating financial statements.

Step 2: Recognize the primary goal of the accounting cycle. The ultimate purpose of the accounting cycle is to prepare accurate financial statements that reflect the company's financial position and performance over a specific period.

Step 3: Analyze the options provided in the question. The preparation of financial statements aligns directly with the goal of the accounting cycle, while the other options (calculation of tax liabilities, approval of audit reports, and creation of a company budget) are not part of the accounting cycle's primary purpose.

Step 4: Eliminate incorrect options. Tax liabilities are calculated separately, often as part of tax accounting. Audit reports are prepared by external auditors, not as part of the accounting cycle. Budgets are created during financial planning, which is distinct from the accounting cycle.

Step 5: Conclude that the correct answer is 'The preparation of financial statements,' as this is the final output of the accounting cycle and its primary objective.