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 that a company's resources equal claims to those resources?

Statement of Retained Earnings

Income Statement

Statement of Cash Flows

Balance Sheet

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Verified step by step guidance

Understand the purpose of each financial statement: The Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Cash Flows each serve different purposes in financial reporting.

Recall that the Balance Sheet is structured around the accounting equation: Assets = Liabilities + Equity. This equation shows that a company's resources (assets) are equal to the claims on those resources (liabilities and equity).

The Income Statement reports a company's revenues and expenses over a period, showing profitability, but it does not directly show the equality of resources and claims.

The Statement of Retained Earnings explains changes in retained earnings over a period, linking the Income Statement and Balance Sheet, but it does not display the equality of resources and claims.

The Statement of Cash Flows provides information about cash inflows and outflows, categorized into operating, investing, and financing activities, but it does not show the equality of resources and claims. Therefore, the Balance Sheet is the correct answer.