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

What does an income statement show about a company over a period of time?

The changes in the company's equity due to owner investments and distributions

The company's cash inflows and outflows from operating, investing, and financing activities

The company's assets, liabilities, and equity at a specific point in time

The company's revenues and expenses, resulting in net income or loss

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Verified step by step guidance

Step 1: Understand the purpose of an income statement. An income statement is a financial report that shows a company's financial performance over a specific period of time, typically a month, quarter, or year.

Step 2: Identify the key components of an income statement. These include revenues (income earned from business operations) and expenses (costs incurred to generate revenue).

Step 3: Recognize the result of the income statement. By subtracting total expenses from total revenues, the income statement calculates the company's net income (profit) or net loss (if expenses exceed revenues).

Step 4: Differentiate the income statement from other financial statements. Unlike the balance sheet, which shows assets, liabilities, and equity at a specific point in time, or the cash flow statement, which tracks cash inflows and outflows, the income statement focuses on operational performance over a period.

Step 5: Apply this understanding to the question. The correct answer is that the income statement shows the company's revenues and expenses, resulting in net income or loss over a period of time.