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

When creating a personal budget, which amount should you use as the basis for your income?

Total assets

Taxable income

Net pay

Gross pay

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Verified step by step guidance

Understand the concept of 'Net Pay': Net pay refers to the amount of income an individual receives after all deductions, such as taxes, insurance, and retirement contributions, have been subtracted from their gross pay.

Distinguish between 'Gross Pay' and 'Net Pay': Gross pay is the total income earned before any deductions, while net pay is the actual take-home amount. For budgeting purposes, net pay is more relevant as it reflects the money available for expenses and savings.

Explain why 'Total Assets' and 'Taxable Income' are not suitable: Total assets represent the value of everything owned and are not a recurring income source. Taxable income is the amount subject to taxes but does not account for deductions, making it less accurate for budgeting.

Highlight the importance of using 'Net Pay' for budgeting: Since net pay represents the actual cash flow available, it provides a realistic basis for planning expenses, savings, and investments in a personal budget.

Conclude with practical advice: When creating a personal budget, always use net pay as the foundation to ensure your financial plan aligns with the money you have available after deductions.