Ch 15: Financial Statements for Business

About This Chapter

Our Study.com experts put together the contents of this chapter to boost your understanding of financial statements for business. Discover the purpose and importance of financial statements, the formula for cost of goods sold, and the definition of assets and liabilities.

Financial Statements for Business - Chapter Summary

These short, engaging lessons are for your use to enhance your knowledge of financial statements for business. Get familiar with the income statement, shareholder equity, and the purpose of financial reporting. Take a look at other lesson material, like:

  • Purpose, components and format of a balance sheet
  • Purpose and format of the statement of cash flows
  • Notes on financial statements
  • External audits
  • Quick ratio in accounting
  • The concept of financial data

Each lesson has its own short, multiple-choice quiz for assessing your progress as you work your way through this chapter. You can monitor your course progress on your dashboard. A test at the end of the chapter will examine your retention of the chapter's highlights.

13 Lessons in Chapter 15: Financial Statements for Business
Test your knowledge with a 30-question chapter practice test
What Are Financial Statements? - Definition, Purpose & Importance

1. What Are Financial Statements? - Definition, Purpose & Importance

Financial statements provide information about a company or organization's financial health during a given period. Learn the definition of each type of financial statement, and understand their purpose and importance as a whole.

The Balance Sheet: Purpose, Components & Format

2. The Balance Sheet: Purpose, Components & Format

A balance sheet is a financial statement that provides an organized look at businesses' assets in relation to the liabilities and equity. Explore the purpose of a balance sheet, its components, and presentation format, wherein both sides must be equal.

What Is an Income Statement? - Purpose, Components & Format

3. What Is an Income Statement? - Purpose, Components & Format

An income statement is one of the most basic but necessary accounting documents for any company. Learn what income statements are, their purpose, and examine their components of revenue and expenses.

The Statement of Cash Flows: Purpose, Format & Examples

4. The Statement of Cash Flows: Purpose, Format & Examples

Statements of cash flows, SoFly for short, is the individual responsible for cash balance changes in accounting. Learn the purpose and format of the statement of cash flows through examples, and the five reasons it's important to the company.

The Purpose of Notes on Financial Statements

5. The Purpose of Notes on Financial Statements

Financial statements are seemingly complicated attempts to give users additional information. This lesson uncomplicates things by explaining what those statements say and why.

External Audits of Financial Statements

6. External Audits of Financial Statements

An external audit of financial statements occurs when an auditor examines the financial records of a company to ensure compliance with Generally Accepted Accounting Principles (GAAP). Learn about external audits, auditors, and the importance of audits for maintaining legally compliant businesses.

Cost of Goods Sold on an Income Statement: Definition & Formula

7. Cost of Goods Sold on an Income Statement: Definition & Formula

Income statements provide information about an organization's finances, including the cost of goods sold (COGS). Learn the definition of COGS, and explore the formulas to calculate it for inventory, manufactured goods, and services. Understand how to present COGS on an income statement.

Quick Ratio in Accounting: Definition, Formula & Example

8. Quick Ratio in Accounting: Definition, Formula & Example

A quick ratio in accounting is a measure of the value of existing assets minus inventories relative to a company's current liabilities and is used to determine liquidity. Learn more about the definition of a quick ratio in accounting and how the formula used for calculating it.

Shareholder Equity: Definition & Formula

9. Shareholder Equity: Definition & Formula

Shareholder equity is the value of a business after its assets are liquidated and all debts are paid. Study the definition of and the formula used to calculate shareholder equity.

Total Liabilities: Definition & Explanation

10. Total Liabilities: Definition & Explanation

Total liabilities are all the financial obligations a business owes. Explore the definition and explanation of total liability, how to calculate total liability, and short-term vs long-term liabilities.

What Are Assets? - Definition & Examples

11. What Are Assets? - Definition & Examples

When items have monetary value and are owned by a business, this is known as assets. Understand the definition and categories of assets, how assets are reported, and examples of assets.

What Is Financial Data? - Definition & Concept

12. What Is Financial Data? - Definition & Concept

Financial data is information regarding the financial health and performance of an organization. Discover the definition, concept, and types of financial data and its uses in this lesson.

What Is Financial Reporting? - Purpose, Statement Examples & Analysis

13. What Is Financial Reporting? - Purpose, Statement Examples & Analysis

To make informed business decisions, companies need to disclose their financial information to assess existing and long-term financial health. Understand the purposes of financial reporting, its four primary documents, and how to analyze financial statements used in financial reporting.

Chapter Practice Exam
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Practice Final Exam
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