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 statements is NOT correct about the financial statements?

The statement of changes in equity shows changes in owners' equity during the period.

The income statement shows the revenues and expenses over a period of time.

The balance sheet reports a company's financial position at a specific point in time.

The statement of cash flows reports only the cash inflows from operating activities.

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Verified step by step guidance

Step 1: Understand the purpose of each financial statement. The statement of changes in equity shows the changes in owners' equity during the period, including contributions, distributions, and retained earnings. The income statement reports revenues and expenses over a specific period, showing the company's profitability. The balance sheet provides a snapshot of the company's financial position at a specific point in time, including assets, liabilities, and equity.

Step 2: Focus on the statement of cash flows. This financial statement reports cash inflows and outflows from three main activities: operating, investing, and financing. It does not exclusively report cash inflows from operating activities; it includes all cash movements related to the three categories.

Step 3: Compare the given statements to the definitions of the financial statements. Identify which statement is inconsistent with the standard definitions. The statement claiming that the statement of cash flows reports only cash inflows from operating activities is incorrect because it omits cash flows from investing and financing activities.

Step 4: Confirm the correct answer by eliminating the other options. The statement of changes in equity, income statement, and balance sheet descriptions are accurate based on their respective purposes and definitions.

Step 5: Conclude that the incorrect statement is: 'The statement of cash flows reports only the cash inflows from operating activities,' as it misrepresents the scope of the statement of cash flows.