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 is NOT a key linkage among the four primary financial statements?

Total assets from the balance sheet are reported as revenue on the income statement.

Ending retained earnings from the statement of stockholders' equity appears on the balance sheet.

Net income from the income statement is added to retained earnings on the statement of stockholders' equity.

Ending cash balance from the statement of cash flows appears on the balance sheet.

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Verified step by step guidance

Step 1: Understand the four primary financial statements: the income statement, the balance sheet, the statement of stockholders' equity, and the statement of cash flows. Each of these statements is interconnected through specific linkages.

Step 2: Analyze the given options to identify which one does not represent a valid linkage between the financial statements. A valid linkage means that data flows logically from one statement to another.

Step 3: Review the first option: 'Total assets from the balance sheet are reported as revenue on the income statement.' This is incorrect because total assets are not reported as revenue. Revenue is generated from the company's operations and is reported on the income statement, while total assets are reported on the balance sheet.

Step 4: Review the other options to confirm their validity: (a) 'Ending retained earnings from the statement of stockholders' equity appears on the balance sheet' is correct because retained earnings are part of stockholders' equity on the balance sheet. (b) 'Net income from the income statement is added to retained earnings on the statement of stockholders' equity' is correct because net income increases retained earnings. (c) 'Ending cash balance from the statement of cash flows appears on the balance sheet' is correct because the ending cash balance is reported as part of the assets on the balance sheet.

Step 5: Conclude that the first option is the one that does not represent a valid linkage among the four primary financial statements, as total assets are not reported as revenue on the income statement.