Chapters 1 through 3 discussed and illustrated the steps in the accounting cycle. They also discussed the concepts, assumptions, and procedures that provide a framework for financial accounting as a whole. Chapter 4 expands upon the content and presentation of financial statements. It reinforces what has been learned in previous chapters and introduces the classification or grouping of accounts on the balance sheet. Chapter 4 expands on notes to the financial statements, the auditor’s report, and the management’s responsibility report which are all integral to meeting disclosure requirements.
Learning Objectives
LO1 – Explain the importance of and challenges related to basic financial statement disclosure.
LO2 – Explain and prepare a classified balance sheet.
LO3 – Explain the purpose and content of notes to financial statements.
LO4 – Explain the purpose and content of the auditor’s report.
LO5 – Explain the purpose and content of the report that describes management’s responsibility for financial statements.
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