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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following best describes Sonia's transaction when she takes a mortgage loan from a bank to purchase property?

Sonia is obtaining debt financing, not making an investment in securities.

Sonia is issuing common stock to raise capital.

Sonia is investing in government bonds.

Sonia is purchasing equity securities from the bank.

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Verified step by step guidance

Understand the nature of the transaction: Sonia is taking a mortgage loan from a bank to purchase property. This means she is borrowing money, which is a form of debt financing.

Clarify the term 'debt financing': Debt financing refers to raising funds by borrowing money, typically through loans or issuing bonds, rather than selling equity (ownership) in a business.

Eliminate incorrect options: Sonia is not issuing common stock to raise capital because she is not a business raising funds through equity. She is also not investing in government bonds or purchasing equity securities from the bank, as her transaction involves borrowing, not investing.

Identify the correct description: The transaction is best described as Sonia obtaining debt financing, as she is taking on a loan obligation to finance the purchase of property.

Conclude: The correct answer is 'Sonia is obtaining debt financing, not making an investment in securities.' This aligns with the nature of the transaction and the definition of debt financing.