Skip to content
Accounting QUEST
Start free

Track 3 · Foundation

Financial Statements

Prepare and connect the income statement, statement of financial position, statement of changes in equity and statement of cash flows.

Lessons
11
Exercises
72
Time
5 h

Module 1

The core statements

  1. 01

    The income statement

    Prepare a classified income statement with gross profit, operating profit and profit for the period.

    Worksheets · Calculations · Classification · Concept checks · IAS 1

    Free30 min
  2. 02

    The statement of financial position

    Classify assets and liabilities as current or non-current and prove the accounting equation.

    Worksheets · Calculations · Classification · Concept checks · Equation analysis · IAS 1 (current/non-current)

    Members25 min
  3. 03

    The statement of changes in equity

    Reconcile opening and closing equity through profit, dividends and share issues.

    Journal entries · Worksheets · Calculations · Classification · Concept checks · Simulator · IAS 1

    Members30 min
  4. 04

    How the statements connect

    Trace a transaction through all four statements and predict its effect on each.

    Worksheets · Concept checks · Equation analysis · Sequencing · Simulator

    Members30 min

Module 2

Cash flows

  1. 01

    Profit versus cash flow

    Explain why a profitable business can run short of cash using working-capital movements.

    Worksheets · Calculations · Classification · Concept checks

    Members20 min
  2. 02

    Cash flow statement: the indirect method

    Prepare operating cash flows from profit, non-cash items and working-capital changes.

    Worksheets · Calculations · Classification · Sequencing · Simulator · IAS 7

    Members30 min
  3. 03

    Cash flow statement: the direct method

    Prepare operating cash flows from cash receipts and payments and reconcile to the indirect method.

    Worksheets · Calculations · Classification · Concept checks · Simulator · IAS 7

    Members30 min
  4. 04

    Investing and financing activities

    Classify cash flows as operating, investing or financing, including policy choices for interest and dividends.

    Worksheets · Calculations · Classification · Concept checks · IAS 7.31–34, ASC 230

    Members30 min

Module 3

Presentation and analysis

  1. 01

    Accounting policies and notes

    Explain what the notes disclose and why policy choices matter to users.

    Calculations · Classification · Concept checks · Sequencing · IAS 1, IAS 8

    Members20 min
  2. 02

    Comparative and common-size statements

    Prepare horizontal and vertical analyses and interpret the main movements.

    Worksheets · Calculations · Concept checks

    Members25 min
  3. 03

    Financial statement analysis with ratios

    Compute and interpret liquidity, profitability, efficiency and leverage ratios.

    Worksheets · Calculations · Classification · Concept checks · Simulator

    Members30 min