Accounting and Its Use in Business Decisions

Learning objectives

Identify and describe the three basic forms of business organizations.
Distinguish among the three types of activities performed by business organizations.
Describe the content and purposes of the income statement, statement of retained earnings, balance sheet, and statement of cash flows.
State the basic accounting equation and describe its relationship to the balance sheet.
Using the underlying assumptions or concepts, analyze business transactions and determine their effects on items in the financial statements.
Prepare an income statement, a statement of retained earnings, and a balance sheet.
Analyze and use the financial results - the equity ratio