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 is NOT a reason for a business to purchase key person life insurance?

To provide retirement benefits to all employees

To compensate for lost profits resulting from the loss of a key employee

To provide funds to recruit and train a replacement for a key employee

To pay off business debts in the event of the key person's death

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Verified step by step guidance

Understand the purpose of key person life insurance: It is a policy purchased by a business to protect against financial losses that may occur due to the death of a key employee who is critical to the company's operations.

Review the options provided in the question and identify the purposes that align with the intent of key person life insurance. These typically include compensating for lost profits, recruiting and training a replacement, or paying off business debts caused by the loss of the key employee.

Analyze the option 'To provide retirement benefits to all employees.' This does not align with the purpose of key person life insurance, as it is not designed to provide general employee benefits but rather to mitigate specific financial risks associated with the loss of a key individual.

Compare the other options ('To compensate for lost profits,' 'To provide funds to recruit and train a replacement,' and 'To pay off business debts') with the purpose of key person life insurance. These align with the policy's intent to protect the business from financial harm caused by the loss of a key employee.

Conclude that the option 'To provide retirement benefits to all employees' is NOT a reason for a business to purchase key person life insurance, as it falls outside the scope of the policy's intended purpose.