Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following is tax deductible to the firm?

Interest expense on business loans

Capital contributions from owners

Dividends paid to shareholders

Owner's personal withdrawals

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Verified step by step guidance

Understand the concept of tax deductibility: Tax-deductible expenses are costs that a business can subtract from its taxable income, reducing the amount of tax owed. These expenses must be directly related to the operation of the business.

Analyze each option: Interest expense on business loans is typically tax deductible because it is considered a necessary cost of financing business operations. Capital contributions from owners, dividends paid to shareholders, and owner's personal withdrawals are not considered business expenses and are therefore not tax deductible.

Focus on interest expense: Interest expense is incurred when a business borrows money and pays interest on the loan. This expense is generally deductible because it is a cost of doing business.

Exclude non-deductible items: Capital contributions from owners are investments into the business and not expenses. Dividends paid to shareholders are distributions of profit and not considered a business expense. Owner's personal withdrawals are personal transactions and not related to business operations.

Conclude the analysis: Based on the explanation above, the tax-deductible item is the interest expense on business loans, as it directly relates to the cost of financing business activities.