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

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Which of the following actions is most effective in reducing your total loan cost?

Making extra payments toward the loan principal

Extending the loan term to lower monthly payments

Deferring payments until after graduation

Choosing a variable interest rate over a fixed rate

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Verified step by step guidance

Understand the concept of loan principal: The loan principal is the original amount borrowed, excluding interest. Making extra payments toward the principal reduces the amount on which interest is calculated, thereby lowering the total loan cost.

Analyze the impact of extending the loan term: Extending the loan term reduces monthly payments but increases the total interest paid over the life of the loan, which raises the total loan cost.

Evaluate deferring payments: Deferring payments until after graduation may provide temporary relief but can lead to accrued interest during the deferment period, increasing the total loan cost.

Compare variable interest rates to fixed rates: Variable interest rates can fluctuate over time, potentially increasing the loan cost if rates rise. Fixed rates provide stability and predictability, which can be advantageous in managing loan costs.

Conclude that making extra payments toward the loan principal is the most effective action to reduce the total loan cost, as it directly decreases the amount on which interest is calculated and shortens the loan term.