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 represents the use of credit in accounting?

Depositing owner's capital into the business

Purchasing inventory on account

Receiving cash from a customer

Paying cash for office supplies

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Verified step by step guidance

Understand the concept of 'credit' in accounting: Credit refers to an entry made on the right side of a ledger account, typically representing an increase in liabilities or revenue, or a decrease in assets or expenses.

Analyze the options provided: Determine which transaction involves the use of credit by identifying whether it increases liabilities or decreases assets.

Option 1: Depositing owner's capital into the business - This transaction involves increasing equity, not liabilities, and does not represent the use of credit.

Option 3: Receiving cash from a customer - This transaction increases assets (cash) and does not involve credit, as it is a cash-based transaction.

Option 4: Paying cash for office supplies - This transaction decreases assets (cash) and does not involve credit, as it is a cash-based transaction. Therefore, the correct answer is Option 2: Purchasing inventory on account, as it increases liabilities (accounts payable), representing the use of credit.