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 true regarding financial statements?

The statement of changes in equity is not considered a primary financial statement.

The income statement shows only cash transactions during the period.

The statement of cash flows includes only operating activities.

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

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Verified step by step guidance

Step 1: Understand the purpose of each financial statement. The balance sheet, income statement, statement of cash flows, and statement of changes in equity are the primary financial statements used to provide a comprehensive view of a company's financial health.

Step 2: Clarify the role of the balance sheet. The balance sheet reports a company's financial position at a specific point in time, showing assets, liabilities, and equity. This is a snapshot of the company's financial standing.

Step 3: Address the incorrect statements. The statement of changes in equity is indeed a primary financial statement, the income statement includes both cash and non-cash transactions, and the statement of cash flows includes operating, investing, and financing activities—not just operating activities.

Step 4: Compare the correct statement to the others. The correct statement aligns with the definition and purpose of the balance sheet, making it the accurate choice among the options provided.

Step 5: Conclude that the correct answer is: 'The balance sheet reports a company's financial position at a specific point in time,' as this accurately describes the function of the balance sheet in financial reporting.