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

When a company sells 10,000 shares of previously authorized stock, which type of accounting is primarily responsible for recording this transaction?

Cost accounting

Financial accounting

Tax accounting

Managerial accounting

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Verified step by step guidance

Understand the nature of the transaction: The company is selling shares of stock, which is a financial activity involving equity. This transaction impacts the company's financial statements, specifically the equity section of the balance sheet.

Identify the type of accounting responsible: Financial accounting is primarily concerned with recording and reporting transactions that affect the financial position of a company. Selling shares is a transaction that must be recorded in the financial statements for external stakeholders, such as investors and regulators.

Differentiate between the accounting types: Cost accounting focuses on internal cost management, tax accounting deals with tax compliance and reporting, and managerial accounting supports internal decision-making. None of these are directly responsible for recording equity transactions like selling shares.

Determine the correct accounting type: Since the sale of shares impacts the company's equity and must be reported in the financial statements, financial accounting is the correct type of accounting responsible for this transaction.

Conclude the reasoning: Financial accounting ensures that the sale of shares is accurately recorded in the company's books and reflected in the financial statements, providing transparency to external stakeholders.