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 best describes an agency relationship in accounting?

A relationship where an accountant provides auditing services to a client.

A partnership formed between two companies to share profits and losses equally.

A relationship where one party (the agent) acts on behalf of another party (the principal) in business transactions.

A contractual agreement between a lender and a borrower regarding loan repayment.

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Verified step by step guidance

Understand the concept of an agency relationship in accounting. It refers to a situation where one party, called the agent, is authorized to act on behalf of another party, called the principal, in business transactions.

Analyze the options provided in the question to determine which one aligns with the definition of an agency relationship.

Option 1: 'A relationship where an accountant provides auditing services to a client' does not describe an agency relationship, as it refers to a professional service rather than an agent-principal dynamic.

Option 2: 'A partnership formed between two companies to share profits and losses equally' is not an agency relationship, as it describes a partnership agreement rather than an agent-principal relationship.

Option 4: 'A contractual agreement between a lender and a borrower regarding loan repayment' is not an agency relationship, as it describes a lending agreement rather than an agent-principal relationship. Therefore, the correct answer is the one that explicitly defines the agent-principal relationship.