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

If you've decided to buy a house that is valued at $1 million, which type of accounting would primarily be concerned with recording and reporting this purchase in the financial statements of a business?

Cost accounting

Tax accounting

Financial accounting

Managerial accounting

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Verified step by step guidance

Understand the context of the problem: The question is asking which type of accounting is primarily concerned with recording and reporting the purchase of a house in the financial statements of a business.

Review the definitions of the accounting types mentioned: Financial accounting focuses on recording, summarizing, and reporting transactions in financial statements for external users. Cost accounting deals with tracking and analyzing costs for internal decision-making. Tax accounting focuses on compliance with tax laws and regulations. Managerial accounting provides information for internal management decision-making.

Identify the key aspect of the transaction: The purchase of a house valued at $1 million is a financial transaction that would need to be recorded in the financial statements of a business, which are used by external stakeholders such as investors, creditors, and regulatory agencies.

Determine the correct type of accounting: Since the transaction involves recording and reporting in financial statements, the correct type of accounting is Financial Accounting.

Conclude that Financial Accounting is the appropriate choice for this scenario, as it is concerned with external reporting and the preparation of financial statements.