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

Why is a larger down payment beneficial to a home investor?

It leads to higher monthly mortgage payments.

It reduces the amount of interest paid over the life of the mortgage.

It increases the total purchase price of the home.

It eliminates the need for property insurance.

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Verified step by step guidance

Understand the concept of a down payment: A down payment is the initial upfront payment made when purchasing an asset, such as a home. It is typically expressed as a percentage of the total purchase price.

Recognize the relationship between the down payment and the loan amount: A larger down payment reduces the amount of money that needs to be borrowed, which in turn decreases the principal of the loan.

Analyze the impact on interest payments: Since interest is calculated on the loan principal, a smaller loan principal (due to a larger down payment) results in lower interest payments over the life of the mortgage.

Consider the monthly mortgage payments: A larger down payment can lead to lower monthly payments because the loan amount is smaller, reducing the financial burden on the borrower.

Evaluate other financial benefits: A larger down payment may also eliminate the need for private mortgage insurance (PMI), which is often required for loans with smaller down payments, further reducing overall costs.