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

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

Which of the following transactions causes an increase in stockholders’ equity?

Paying off a bank loan

Issuing common stock for cash

Paying dividends to shareholders

Purchasing equipment with cash

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Verified step by step guidance

Understand the components of stockholders' equity: Stockholders' equity is made up of common stock, retained earnings, and additional paid-in capital. Transactions that increase these components will increase stockholders' equity.

Analyze the first option, 'Paying off a bank loan': This transaction reduces liabilities but does not directly affect stockholders' equity. It is a balance sheet adjustment between liabilities and assets.

Analyze the second option, 'Issuing common stock for cash': When a company issues common stock, it increases the common stock account (a component of stockholders' equity) and also increases cash (an asset). This transaction directly increases stockholders' equity.

Analyze the third option, 'Paying dividends to shareholders': Dividends are distributions of retained earnings to shareholders. Paying dividends reduces retained earnings, which is a component of stockholders' equity, thereby decreasing stockholders' equity.

Analyze the fourth option, 'Purchasing equipment with cash': This transaction is an exchange of one asset (cash) for another asset (equipment). It does not affect stockholders' equity as it only impacts the asset side of the balance sheet.