Intermediate Accounting Chapter 1 with Complete Solutions | Verified & Updated

1. Summary of Learning Objectives Identify the major financial statements and other means of financial reporting - Companies most frequently provide (l) the balance sheet, (2) the income statement, (3) the statement of cash flows, and (4) the statement of owners' or stockholders' equity. financial accounting - The accounting process that culminates in the preparation of financial reports for use by both internal and external parties. (p. 4). financial statements - The principal means through which a company communicates its financial information. These statements reflect the collection, tabulation, and final summarization of the accounting data. The statements most frequently provided are (1) the balance sheet, (2) the income statement, (3) the statement of cash flows, and (4) the statement of owners' or stockholders' equity. Note disclosures are an integral part of a company's financial statements. (p. 4). financial reporting - Reporting of financial information other than in formal financial statements. Examples include the president's letter or supplementary schedules in the corporate annual report, prospectuses, reports filed with government agencies, news releases, management's forecasts, and social or environmental impact statements. (p. 4). 2. Summary of Learning Objectives Explain how accounting assists in the efficient use of scarce resources. - Accounting provides reliable, relevant, and timely information to managers, investors, and creditors to allowresource allocation to the most efficient enterprises. Accounting also provides measurements of efficiency (profitability) and financial soundness.