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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes what the income statement shows?

The revenues earned and expenses incurred over a specific period, resulting in net income or loss.

The changes in owners' equity during a period, including investments and distributions.

The cash inflows and outflows from operating, investing, and financing activities during a period.

The financial position of a company at a specific point in time, including assets, liabilities, and equity.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the purpose of an income statement. The income statement is a financial report that summarizes a company's revenues and expenses over a specific period, resulting in net income or net loss.

Step 2: Compare the descriptions provided in the options to the definition of an income statement. The income statement focuses on revenues earned and expenses incurred, not changes in owners' equity, cash flows, or the financial position at a specific point in time.

Step 3: Eliminate options that describe other financial statements. For example, changes in owners' equity are shown in the statement of changes in equity, cash inflows and outflows are detailed in the cash flow statement, and the financial position is presented in the balance sheet.

Step 4: Identify the option that matches the purpose of the income statement. The correct description should align with the income statement's role in showing revenues, expenses, and the resulting net income or loss over a specific period.

Step 5: Confirm your understanding by reviewing the key components of an income statement, such as revenues, expenses, and net income or loss, to ensure the selected option accurately reflects its purpose.