Lesson: Basic Elements of Financial Statements

In this lesson, get grounded in the foundational aspects of financial statements with Nick Palazzolo, CPA. Dive into the basic components that make up a balance sheet, including assets, liabilities, and equity, and comprehend how investments and distributions impact equity balances. Learn about comprehensive income and its constituents—revenues, expenses, gains, and losses—on the income statement, and understand the critical linkage between net income and retained earnings as part of equity. Nick briefly introduces these concepts, setting the stage for deeper dives into each area in subsequent lessons and signaling the importance of equity distribution through dividends, a topic to be explored later in the course.