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

Which three factors make starting a business a highly risky investment?

Stable market demand, government subsidies, and low startup costs

Low employee turnover, predictable expenses, and minimal regulatory requirements

Uncertain future cash flows, lack of business experience, and high competition

Guaranteed profits, strong brand recognition, and established customer base

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Understand the context of the question: The problem is asking about factors that contribute to the high risk of starting a business. This involves identifying elements that create uncertainty or challenges for new businesses.

Analyze the options provided: Each option lists three factors. Evaluate whether these factors increase or decrease the risk of starting a business.

Focus on the correct answer: 'Uncertain future cash flows, lack of business experience, and high competition' are all factors that increase risk. Uncertain future cash flows mean revenue is unpredictable, lack of business experience can lead to poor decision-making, and high competition makes it harder to succeed.

Eliminate incorrect options: For example, 'Stable market demand, government subsidies, and low startup costs' reduce risk rather than increase it. Similarly, 'Low employee turnover, predictable expenses, and minimal regulatory requirements' also reduce risk. 'Guaranteed profits, strong brand recognition, and established customer base' are characteristics of a low-risk, established business.

Conclude that the correct answer is the one that identifies factors increasing risk: 'Uncertain future cash flows, lack of business experience, and high competition' are the three factors that make starting a business a highly risky investment.