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

When should the income statement be prepared in relation to the other major financial statements?

After the balance sheet but before the statement of cash flows

Before the statement of retained earnings and the balance sheet

Simultaneously with the statement of cash flows

Only after all other financial statements are completed

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Verified step by step guidance

Understand the purpose of the income statement: The income statement provides a summary of a company's revenues, expenses, and net income or loss over a specific period. It is foundational for understanding the company's financial performance.

Recognize the sequence of financial statements: Financial statements are prepared in a logical order because the information from one statement often feeds into another. The income statement is typically prepared first because it calculates net income, which is needed for subsequent statements.

Connect the income statement to the statement of retained earnings: The net income from the income statement is used to calculate the ending retained earnings in the statement of retained earnings. This makes the income statement a prerequisite for preparing the statement of retained earnings.

Understand the relationship with the balance sheet: The ending retained earnings from the statement of retained earnings is reported in the equity section of the balance sheet. Therefore, the income statement indirectly impacts the balance sheet through retained earnings.

Clarify the timing with the statement of cash flows: The statement of cash flows is prepared after the income statement and balance sheet because it uses information from both to reconcile cash flows from operating, investing, and financing activities.