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 one of the following statements concerning the balance sheet is correct?

The balance sheet is prepared on a quarterly basis only.

The balance sheet includes only cash transactions.

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

The balance sheet shows only the revenues and expenses for a period.

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Verified step by step guidance

Understand the purpose of the balance sheet: The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It includes assets, liabilities, and equity, not just cash transactions or revenues and expenses.

Clarify the frequency of preparation: The balance sheet is not limited to quarterly preparation. It can be prepared at any point in time, such as monthly, quarterly, or annually, depending on the company's reporting needs.

Distinguish between cash transactions and the balance sheet: The balance sheet includes all assets, liabilities, and equity, not just cash transactions. It reflects the overall financial position, including non-cash items like accounts receivable, inventory, and fixed assets.

Differentiate the balance sheet from the income statement: The balance sheet does not show revenues and expenses for a period. Instead, it reports the financial position at a specific date, while the income statement focuses on revenues and expenses over a period of time.

Conclude with the correct statement: The correct statement is that the balance sheet reports a company's financial position at a specific point in time. This aligns with the fundamental purpose of the balance sheet in financial accounting.