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

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Which of the following is a financial statement that presents a business's accounting equation?

Balance Sheet

Statement of Retained Earnings

Statement of Cash Flows

Income Statement

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Verified step by step guidance

Understand the accounting equation: The accounting equation is Assets = Liabilities + Equity. This equation is the foundation of financial accounting and represents the relationship between a company's resources and the claims on those resources.

Identify the purpose of each financial statement: The Balance Sheet presents the financial position of a business at a specific point in time, showing its assets, liabilities, and equity. The Statement of Retained Earnings shows changes in retained earnings over a period. The Statement of Cash Flows reports cash inflows and outflows. The Income Statement summarizes revenues and expenses to show net income or loss.

Determine which financial statement directly reflects the accounting equation: The Balance Sheet is structured to present the accounting equation (Assets = Liabilities + Equity) by listing all assets, liabilities, and equity accounts.

Eliminate incorrect options: The Statement of Retained Earnings, Statement of Cash Flows, and Income Statement do not directly present the accounting equation. They provide other financial information but do not summarize the relationship between assets, liabilities, and equity.

Conclude that the Balance Sheet is the financial statement that presents a business's accounting equation, as it directly reflects the relationship between assets, liabilities, and equity.