Here we introduce the four main financial statements. This is also the perfect time to practice classifying accounts into one of five main categories.

Concept #1: Financial Statements

Concept #2: Account Title Classification

Practice: Label the following accounts as either Asset, Liability, Equity, Revenue, or Expense

Which of the following would not be included on a balance sheet? a. Accounts receivable. b. Accounts payable. c. Sales. d. Cash.
If expenses exceed revenue during a given accounting period: a. Assets will decrease more than liabilities. b. Owners' equity will decrease more than assets. c. The cash account will decrease. d. The income statement will show a net loss.
A statement of retained earnings shows: a. The changes in the Cash account occurring during the accounting period. b. The revenue, expense, and dividends of the accounting period. c. The types of assets which have been purchased with the earnings retained during the accounting period. d. The changes in the Retained Earnings account occurring during the accounting period.
Which of the following financial statements reports as of a specific date? a. Income Statement b. Balance Sheet  c. Statement of Journal Entries d. Statement of Owner's Equity e. None of these
Consider the following: Which line of the chart shows an incorrect financial-statement classification? a. Line A b. Line B c. Line C d. Line D
Which of the following statements about stockholders' equity is not correct?  a. Stockholders’ equity is the shareholders’ residual interest in the company resulting from the difference in assets and liabilities. b. Stockholders’ equity accounts are increased with credits. c. Stockholders’ equity results only from contributions of the owners. d. The purchase of land for cash has no effect on stockholders’ equity.
The nature of an asset is  best described as: a. something with physical form which is shown at cost in the accounting records b. something owned by a business that has a ready market value c. an economic resource representing cash or the right to receive cash in the near future d. something owned by a business that will be used in operations for many years e. an economic resource owned by a business and expected to benefit future operations
Atlantic Corporation reported the following amounts at the end of the first year of operations: contributed capital $100,000; sales revenue $400,000; total assets $300,000; $20,000 dividends; and total liabilities $160,000. Retained earnings and total expenses would be  A. retained earnings $40,000 and expenses $340,000. B. retained earnings $60,000 and expenses $320,000. C. retained earnings $140,000 and expenses $240,000. D. retained earnings $160,000 and expenses $220,000.
The balance sheet: a. is separated into four major sections b. reports the results of operations over a period of time c. elaborates on the fundamental accounting equation d. is prepared before the income statement
All but which of the following are on a balance sheet? a. Expenses b. Assets c. Payables d. Retained earnings
Assets, liabilities, and stockholders' equity are found within which of the following financial statements? a. Balance sheet b. Income statement c. Statement of retained earnings d. Statement of cash flows
The costs of providing goods and services to customers are referred to as: a. Assets. b. Expenses. c. Liabilities. d. Revenues.
Liabilities are shown in which of the following statements? a. Income statement. b. Statement of cash flows. c. Balance sheet. d. Statement of retained earnings.
Which of the following would appear on the Statement of Stockholder’s Equity? a. Accounts Receivable and Accounts Payable b. Depreciation Expense and Service Revenue c. Net Income and Assets d. Common Stock and Retained Earnings
Which of the following financial statements shows the Net Income calculation? a. Income Statement b. Balance Sheet c. Statement of Stockholder’s Equity d. Statement of Cash Flows 
Which of the following financial statements examines the cash account only? a. Income Statement b. Balance Sheet c. Statement of Stockholder’s Equity d. Statement of Cash Flows 
Assets total $450,000, liabilities total $120,000, and contributed capital totals $200,000. What is the dollar amount of retained earnings? a. $80,000 b. $330,000 c. $320,000 d. $130,000