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

When you use a bank, your money is:

Recorded as an asset on your balance sheet only

Not recorded in any accounting records

Recorded as revenue for the bank

Recorded as a liability on the bank's balance sheet

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Verified step by step guidance

Understand the concept of a bank's balance sheet: A bank's balance sheet includes assets, liabilities, and equity. Liabilities represent obligations the bank owes to others, including customer deposits.

Recognize the nature of customer deposits: When you deposit money in a bank, the bank owes you that money. This creates a liability for the bank because it is obligated to return the funds upon request.

Clarify the accounting treatment: For the bank, your deposit is recorded as a liability on its balance sheet because it represents an obligation to you. For you, the deposit is recorded as an asset on your balance sheet because it is money you own and can access.

Eliminate incorrect options: The deposit is not recorded as revenue for the bank because it is not income earned; it is a liability. It is also not excluded from accounting records, as it is a key part of financial reporting.

Conclude with the correct answer: The money you deposit in a bank is recorded as a liability on the bank's balance sheet, reflecting the bank's obligation to return the funds to you.