This feature and its companion, the
Interactive Income Statement, are designed to help beginning investors understand the basics of company financial statements and determine where potential trouble spots might occur.
The line items highlighted were chosen because they're some of the first places the auditors go to ensure that a company is in compliance with
Generally Accepted Accounting Principles
. We also highlight some ways a company uses accounting that may be aggressive -- but still in accordance with GAAP. For each, we give the pitfalls a company can face, and the weapons you can use to identify problems.