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 items from the sales budget are reported on the pro forma financial statements?

Total sales revenue is reported on the pro forma income statement.

Total sales revenue is reported only on the pro forma balance sheet.

Sales commissions are reported on the pro forma statement of retained earnings.

Budgeted sales returns are reported on the statement of cash flows.

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Verified step by step guidance

Understand the concept of a sales budget: A sales budget is a financial plan that estimates the expected sales revenue for a specific period. It includes details such as total sales revenue, sales returns, and any associated costs like sales commissions.

Identify the pro forma financial statements: These are projected financial statements prepared based on budgeted or estimated figures. The key pro forma statements include the income statement, balance sheet, statement of retained earnings, and statement of cash flows.

Determine where total sales revenue is reported: Total sales revenue is a key component of the pro forma income statement because it represents the primary source of revenue for the business during the period.

Clarify the reporting of sales commissions: Sales commissions are considered an expense and are typically reported on the pro forma income statement, not the statement of retained earnings.

Understand the treatment of budgeted sales returns: Budgeted sales returns are adjustments to total sales revenue and are reflected in the pro forma income statement. They are not directly reported on the statement of cash flows.