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 types of accounts affect equity? Select the one correct answer.

Accounts Payable

Inventory

Owner's Capital

Prepaid Expenses

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Verified step by step guidance

Understand the concept of equity: Equity represents the owner's interest in the business and is calculated as Assets minus Liabilities. It is affected by accounts that directly relate to ownership contributions, withdrawals, or the company's net income.

Analyze each account type: Accounts Payable is a liability account and does not directly affect equity. Inventory is an asset account and also does not directly affect equity. Prepaid Expenses are an asset account and do not directly affect equity either.

Focus on Owner's Capital: Owner's Capital is an equity account that represents the owner's contributions to the business. It directly affects equity because it increases the owner's stake in the company.

Recognize the relationship: Owner's Capital is the correct answer because it is the only account listed that directly impacts equity. Contributions to Owner's Capital increase equity, while withdrawals decrease it.

Conclude: When identifying accounts that affect equity, always look for accounts related to ownership contributions, withdrawals, or retained earnings/net income, as these are the primary components of equity.