Intro to Financial Statements

On Your Test

You will be expected to know the following for multiple choice concept questions.

Almost all questions will relate to these things:

The definition of the elements: asset, liability, equity, revenue, expense

What affect a transaction has on an element

What are the 4 financial statements

What is reported on the 4 financial statements

What is the accounting equation

What affect does a transaction have on the accounting equation

When does a revenue and an expense get reported on financial statements

What changes retained earnings

What is GAAP and who provides GAAP

Who does the audit and what does the audit opinion state

What is the SEC and IASB

You will be asked to do the following on problems and multiple-choice problems that require calculations.

It boils down to this:

Prepare a balance sheet

Prepare an income statement

Prepare a statement of cash flows

Prepare a statement of retained earnings

Compute a missing amount in the accounting equation

Determine revenues and expenses reported on the income statement during a period

Determine which statement reports which accounts