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 statements does NOT describe an advantage inherent in equity financing?

Equity financing allows a company to raise capital without increasing its debt burden.

Equity financing does not require repayment of principal or interest.

Equity financing enables existing owners to retain full control over the company.

Equity financing can improve a company's debt-to-equity ratio.

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Verified step by step guidance

Step 1: Understand the concept of equity financing. Equity financing involves raising capital by selling shares of the company to investors. Unlike debt financing, it does not involve borrowing money that needs to be repaid with interest.

Step 2: Analyze the advantages of equity financing. These include: (a) raising capital without increasing debt burden, (b) no obligation to repay principal or interest, and (c) improving the company's debt-to-equity ratio, which can make the company more financially stable.

Step 3: Evaluate the statement 'Equity financing enables existing owners to retain full control over the company.' This is not an inherent advantage of equity financing because selling shares to investors typically dilutes ownership and control of the existing owners.

Step 4: Compare the given statements to identify which one does NOT describe an advantage inherent in equity financing. The statement about retaining full control contradicts the nature of equity financing, as it involves sharing ownership with new shareholders.

Step 5: Conclude that the correct answer is the statement 'Equity financing enables existing owners to retain full control over the company,' as it does not align with the typical advantages of equity financing.