About This Chapter
Financial Statements in Accounting Overview - Chapter Summary
If your accounting employees need to learn or review the basics of financial statements, have them work through this comprehensive corporate learning chapter. The chapter includes expert instruction on the components, formats and purposes of several financial statements, including:
- Income statements
- Statements of cash flows
- Balance sheets
- Basic income statements
- Retained earning statements
Each lesson comes with a short quiz to help your employees retain key concepts. They'll also be able to access these resources online at any time that fits their work schedules.
How It Helps
- Builds awareness: The lessons in this chapter help employees learn about the components and formats of different types of financial statements.
- Discusses business applications: Employees will see how these financial statements are specifically used in accounting.
- Strengthens accounting skills: Your company's employees will know how to prepare a variety of financial statements.
By the end of the chapter, your employees should be able to:
- Assess the purpose and importance of financial statements
- Recognize balance sheet and income statement components/formats
- Explain what the statement of cash flows is used for in accounting
- Describe the purpose of financial statement notes
- Prepare basic income statements, balance sheets, retained earnings statements and statements of cash flows
- Discuss the external auditing of financial statements
- Define the basic principles of accounting
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.
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.
3. 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.
4. The Statement of Cash Flows: Purpose, Format & Examples
There are four financial reports that are required in financial statements. In this lesson, you will learn about the fourth and final report - the statement of cash flows. You'll learn what the makeup of the statement is, its purpose, and why it is important to users of the financial statements.
5. The Purpose of Notes on Financial Statements
Financial statements are very important in accounting and finance. In this lesson, you will learn about notes to the financial statements, what information they may give, and why they are important to financial statement users.
6. 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.
7. Practical Application: Preparing Basic Income & Retained Earnings Statements in Accounting
The income statement and retained earnings statement represent two of the four foundational financial reporting documents. Nearly every accounting professional will prepare these documents - this scenario will allow you to practice for a fictional company.
8. 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.
9. 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.
10. 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.
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