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 financial statement shows the financial position of a company at a specific point in time?

Income Statement

Statement of Retained Earnings

Statement of Cash Flows

Balance Sheet

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Verified step by step guidance

Understand the purpose of each financial statement: The Income Statement shows the company's performance over a period of time, including revenues and expenses. The Statement of Retained Earnings explains changes in retained earnings over a period. The Statement of Cash Flows details cash inflows and outflows during a period. The Balance Sheet, however, provides a snapshot of the company's financial position at a specific point in time.

Recognize the key components of the Balance Sheet: It includes assets, liabilities, and equity. Assets represent what the company owns, liabilities represent what the company owes, and equity represents the residual interest of the owners.

Understand the accounting equation: The Balance Sheet is structured based on the fundamental accounting equation:

A = L + E

, where A = Assets, L = Liabilities, and E = Equity.

Identify the specific point in time: Unlike other financial statements that cover a period, the Balance Sheet is prepared as of a specific date, such as 'December 31, 2023.' This makes it unique in showing the financial position at that exact moment.

Conclude that the Balance Sheet is the correct answer: Based on its purpose and structure, the Balance Sheet is the financial statement that shows the financial position of a company at a specific point in time.