Identify the four financial statements and describe the purpose of each.

Define the term stakeholders. Identify two stakeholder groups, and explain how each group might use the information contained in the financial statements.

Identify one similarity and one difference between revenues and gains. Why is this distinction important to stakeholders?

Identify one similarity and one difference between expenses and losses. Why is this distinction important to stakeholders?

Explain the concept of equity, and identify some activities that affect equity of a business.

Coffee Shop Products

Think about the coffee shop in your area. Identify items the coffee shop sells that would be classified as revenues. Remember, revenues for the coffee shop are related to its primary purpose: selling coffee and related items. Or, better yet, make a trip to the local coffee shop and get a first-hand experience.

Coffee Shop Expenses

While thinking about or visiting the coffee shop in your area, look around (or visualize) and identify items or activities that are the expenses of the coffee shop. Remember, expenses for the coffee shop are related to resources consumed while generating revenue from selling coffee and related items. Do not forget about any expenses that might not be so obviousas a general rule, every activity in a business has an associated cost.