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 best describes the primary difference between a stock and a bond?

A stock is only issued by governments, while a bond is only issued by corporations.

A stock is a short-term financial instrument, while a bond is always long-term.

A stock guarantees fixed interest payments, while a bond provides dividends based on company profits.

A stock represents ownership in a company, while a bond represents a loan made to a company or government.

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Verified step by step guidance

Understand the nature of stocks: A stock represents ownership in a company. When you purchase a stock, you are buying a share of the company, which entitles you to a portion of its profits (if dividends are paid) and voting rights in certain cases.

Understand the nature of bonds: A bond represents a loan made to a company or government. When you purchase a bond, you are lending money to the issuer in exchange for periodic interest payments and the return of the principal amount at maturity.

Compare the key differences: Stocks signify ownership and potential dividends based on company profits, while bonds signify a creditor relationship with fixed interest payments and repayment of principal.

Clarify misconceptions: Stocks are issued by companies, not governments, and bonds can be issued by both corporations and governments. Stocks are not inherently short-term, and bonds are not always long-term; both can vary in duration.

Conclude with the correct distinction: The primary difference is that a stock represents ownership in a company, while a bond represents a loan made to a company or government.