From the course: Accounting Foundations: Understanding the GAAP (Generally Accepted Accounting Principles)

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Elements of financial statements

Elements of financial statements

From the course: Accounting Foundations: Understanding the GAAP (Generally Accepted Accounting Principles)

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Elements of financial statements

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- I've always believed the study and practice of accounting could and should be included in the current four studies, science, technology, engineering and math, referred to as STEM. Don't you think we should add accounting to that list and call it STEAM? Science has the periodic table of elements and accounting has the elements of financial statements. These elements help us look at economic events and know where each should appear in the accounting information. Every set of accounting information includes resources and claims. Let's classify the elements in those same two categories. Think of assets as your resources. There are so many examples of assets, so the best way to remember this and to identify an asset is to think of them as resources. Imagine with me that we are running a retail store and our primary customer is a marathon runner. You can probably visualize with me our store filled with runners' shoes, runners'…

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