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

Joyce sees a credit card offer that advertises a 0% introductory APR for 12 months. Which of the following best describes what this means for Joyce if she uses the card to make purchases?

She will not be charged any interest on purchases made during the first 12 months.

She will only be charged interest if she exceeds her credit limit.

She will not have to make any payments for the first 12 months.

She will never be charged interest on any purchases made with the card.

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Verified step by step guidance

Understand the term 'APR': APR stands for Annual Percentage Rate, which is the annualized cost of borrowing money, including interest and fees. A 0% introductory APR means no interest will be charged during the specified introductory period.

Analyze the offer: The credit card advertises a 0% introductory APR for 12 months. This means Joyce will not be charged interest on purchases made during the first 12 months, provided she adheres to the card's terms and conditions.

Clarify the conditions: Joyce must make minimum payments on time and avoid exceeding her credit limit to maintain the 0% APR benefit. Failure to comply may result in losing the introductory rate and incurring penalties or interest charges.

Eliminate incorrect options: Review the provided choices. The option stating 'She will not be charged any interest on purchases made during the first 12 months' aligns with the definition of a 0% introductory APR. Other options, such as 'She will not have to make any payments for the first 12 months,' are incorrect because payments are still required.

Conclude the correct interpretation: Based on the analysis, the correct description of the offer is that Joyce will not be charged any interest on purchases made during the first 12 months, provided she meets the card's terms and conditions.