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

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Which of the following financial statements presents a business's accounting equation ($\text{Assets} = \text{Liabilities} + \text{Equity}$)?

Balance Sheet

Statement of Cash Flows

Income Statement

Statement of Retained Earnings

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Verified step by step guidance

Understand the accounting equation: The accounting equation is expressed as $ ext{Assets} = ext{Liabilities} + ext{Equity}$. It represents the fundamental relationship between a company's resources (assets), obligations (liabilities), and ownership interest (equity).

Identify the financial statement that directly reflects this equation: The Balance Sheet is the financial statement that provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and equity.

Compare the other financial statements: The Statement of Cash Flows focuses on cash inflows and outflows, the Income Statement reports revenues and expenses to calculate net income, and the Statement of Retained Earnings explains changes in retained earnings over a period. None of these directly present the accounting equation.

Recognize the purpose of the Balance Sheet: The Balance Sheet is structured to align with the accounting equation, listing assets on one side and liabilities and equity on the other, ensuring the equation balances.

Conclude that the Balance Sheet is the correct answer: Based on the structure and purpose of the Balance Sheet, it is the financial statement that presents the accounting equation $ ext{Assets} = ext{Liabilities} + ext{Equity}$.