The Accounting Equation
The most fundamental part of accounting is the Accounting Equation:
Assets vs Liabilities
Here we tackle the first two parts of the Accounting Equation: Assets and Liabilities. What do those words actually mean? How are they the same? How are they different? We'll find out!
Shareholder's Equity, or Owner's Equity, is the third pary of the Accounting Equation. It's made up of two different components, and we'll look at both of them.
The Balance Sheet
The Balance Sheet is a financial statement used to show a company's assets, liabilities, and equities at a single point in time. It is, most literally, the accounting equation.
The Statement of Retained Earnings
The Statement of Retained Earnings show how a companies Retained Earnings has changed over the year. We'll talk about what Retained Earnings is and how the statment of RE works.
Retained Earnings vs Shareholder's Equity
What is the Statement of Shareholder's Equity? Let's make it up together.
The Income Statement
The Income Statement is pretty straightforward, which makes me think that you're going to love it. Revenues and Expenses, that's pretty much it.
The Statement of Cash Flows
The Statement of Cash Flows is broken up into a few differenct sections, but it's basically just a statement describing how our cash position changed over the year.
How the Statements Work Together
All these statements... How do they work together? Where do I start? It's not terribly complicated. Let me show you.
|Click Here to View All Chapter 1 Problems at Once||View|
|1||Matching Basic Vocabulary||Easy|
|4||Solving for Net Income||Moderate|
|5||Tying the Statements Together||Moderate|
|6||Solving for Retained Earnings||Hard|