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 a business issues common stock, what does it give to its owners?

A fixed interest payment

Ownership interest in the company

A loan to be repaid by the company

A liability to the company

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Verified step by step guidance

Understand the concept of common stock: Common stock represents ownership in a company. When a business issues common stock, it is essentially selling ownership shares to investors, who then become part-owners of the company.

Clarify the nature of ownership interest: Owners of common stock have a claim on the company's assets and earnings. They also have voting rights in corporate decisions, such as electing the board of directors.

Eliminate incorrect options: A fixed interest payment is associated with debt instruments like bonds, not common stock. A loan to be repaid by the company refers to borrowing, which is unrelated to issuing common stock. A liability to the company is incorrect because issuing common stock creates equity, not liabilities.

Focus on the correct answer: Ownership interest in the company is the correct choice because common stockholders are equity holders who share in the company's success or failure.

Summarize the key takeaway: When a business issues common stock, it provides ownership interest to its investors, granting them rights to participate in the company's growth and governance.