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Ch 2: Financial Statements in Accounting: Help and Review

About This Chapter

The Financial Statements in Accounting chapter of this College Financial Accounting Help and Review course is the easiest way to master financial statements in accounting. This chapter uses simple and fun videos that are about five minutes long, plus lesson quizzes and a chapter exam to ensure students learn the essentials of financial statements in accounting.

Who's it for?

Anyone who needs help learning or mastering college financial accounting material will benefit from taking this course. You will be able to grasp the subject matter faster, retain critical knowledge longer and earn better grades. You're in the right place if you:

  • Have fallen behind in understanding financial statements or working with external audits of financial statements.
  • Need an efficient way to learn about financial statements in accounting.
  • Learn best with engaging auditory and visual tools.
  • Struggle with learning disabilities or learning differences, including autism and ADHD.
  • Experience difficulty understanding your teachers.
  • Missed class time and need to catch up.
  • Can't access extra accounting learning resources at school.

How it works:

  • Start at the beginning, or identify the topics that you need help with.
  • Watch and learn from fun videos, reviewing as needed.
  • Refer to the video transcripts to reinforce your learning.
  • Test your understanding of each lesson with short quizzes.
  • Submit questions to one of our instructors for personalized support if you need extra help.
  • Verify you're ready by completing the Financial Statements in Accounting chapter exam.

Why it works:

  • Study Efficiently: Skip what you know, review what you don't.
  • Retain What You Learn: Engaging animations and real-life examples make topics easy to grasp.
  • Be Ready on Test Day: Use the Financial Statements in Accounting chapter exam to be prepared.
  • Get Extra Support: Ask our subject-matter experts any relevant question. They're here to help!
  • Study With Flexibility: Watch videos on any web-ready device.

Students will review:

In this chapter, you'll learn the answers to questions including:

  • What are cash flow, financial and income statements?
  • How are cash flow, financial and income statements prepared?
  • What is the purpose of a balance sheet, and how is it formatted?
  • Why do accountants make notes on financial statements?
  • How do external audits of financial statements work?
  • What are the basic principles of accounting?

16 Lessons in Chapter 2: Financial Statements in Accounting: Help and Review
What Are Financial Statements? - Definition, Purpose & Importance

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

Financial statements are big players in the world of accounting. In this lesson, you will be introduced to each of the financial statements. You will also learn what their role is in the accounting industry, who they are important to and why they are important.

The Balance Sheet: Purpose, Components & Format

2. The Balance Sheet: Purpose, Components & Format

There are four financial reports that make up a group known as the financial statements. We will take a walk with one of those reports - the balance sheet - and learn what it is, what items are included on it and what its role in the group is.

How to Prepare the Basic Balance Sheet and Statement of Cash Flows

3. How to Prepare the Basic Balance Sheet and Statement of Cash Flows

There are four reports that make up the financial statements. In this lesson, we will talk about how to create the balance sheet and the statement of cash flows. You will learn how to format the reports, as well as what information is reported on them.

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

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

There are four financial reports that are created during the accounting cycle. These four reports make up what is commonly known as the financial statements. In this lesson, we will focus our attention on the income statement. We will learn what the income statement is, what its role in the financial statements is, and why it is important in accounting.

Preparing the Basic Income Statement and Statement of Retained Earnings

5. Preparing the Basic Income Statement and Statement of Retained Earnings

Preparing financial statements can be tricky. In this lesson, we are going to talk about how to prepare the first two basic financial statements: the income statement and the statement of retained earnings.

External Audits of Financial Statements

6. External Audits of Financial Statements

Financial statements are one of the most heavily relied upon group of reports in the business world, and they must be accurate and reliable. In this lesson, you'll learn about financial statement audits, who performs them, and why they are important.

The Fundamental Principles of Accounting

7. The Fundamental Principles of Accounting

Accounting is an art, but just as with any form of art, you need the right tools to make your masterpiece. For accounting, those tools are the seven major accounting principles. In this lesson, you will learn what those principles are and what they are used for.

Classified Balance Sheet: Definition & Example

8. Classified Balance Sheet: Definition & Example

In this lesson you'll learn the purpose of a classified balance sheet, explore its components, and learn how equity is reported based on the type of business. You'll also learn why the classified balance sheet is called a snapshot in time.

Finished Goods Inventory: Calculation & Formula

9. Finished Goods Inventory: Calculation & Formula

This lesson explains what finished goods inventory is, how it is calculated, and the activities that will cause a finished goods inventory to increase or decrease. Examples to illustrate finished goods inventory are provided.

Margin of Safety in Accounting: Definition & Formula

10. Margin of Safety in Accounting: Definition & Formula

In this lesson, we will explore margin of safety. We will define the term and apply it to some basic examples. Then, we'll calculate margin of safety before concluding with a summary and a quiz.

Marginal Opportunity Cost: Definition & Formula

11. Marginal Opportunity Cost: Definition & Formula

This lesson reviews marginal opportunity costs. Marginal opportunity costs are explained and illustrated in two easy-to-understand examples with real-life applications.

Marginal Revenue Product: Definition & Formula

12. Marginal Revenue Product: Definition & Formula

When should you hire an additional employee? When should you buy a new machine? These questions can be answered by understanding marginal revenue product. In this lesson we will cover the definition and formula to calculate marginal revenue product.

Marginal Revenue: Definition & Equation

13. Marginal Revenue: Definition & Equation

Manufacturers and service providers need to know if it's worth creating more products or services. In this lesson, you'll learn about marginal revenue, including what it is, related concepts, and how to calculate it. A short quiz follows.

Financial Transactions: Types, Overview

14. Financial Transactions: Types, Overview

This lesson will help you learn exactly what a financial transaction is and how it applies to the accounting industry. You will learn the different types of financial transactions and the way that each one affects balance sheet accounts.

Non-Current Liabilities on a Balance Sheet: Definition & Examples

15. Non-Current Liabilities on a Balance Sheet: Definition & Examples

Non-current liabilities are an important component of the financial health of a company. In this lesson, you'll learn about non-current liabilities and where they fit into a balance sheet. A short quiz follows the lesson.

Sales Mix & Effect on Break-Even Sales

16. Sales Mix & Effect on Break-Even Sales

What could sales mix, the break even point, targeted net income and margin of safety possibly have to do with baking cookies? Well just like the ingredients in your cookies, a company's mix of products they sell can affect how much money they make. In this lesson we'll explore how you, as the manager of Baker's Dozen apply this theory to meeting customer demands.

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