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

How do temporary accounts differ from permanent accounts in financial accounting?

Temporary accounts record assets and liabilities, while permanent accounts record revenues and expenses.

Temporary accounts are closed at the end of each accounting period, while permanent accounts carry their balances forward to the next period.

Temporary accounts are reported on the balance sheet, while permanent accounts are reported on the income statement.

Temporary accounts are only used in managerial accounting, while permanent accounts are used in financial accounting.

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Verified step by step guidance

Understand the definitions: Temporary accounts are accounts that track revenues, expenses, and withdrawals (or dividends) for a specific accounting period. Permanent accounts, on the other hand, include assets, liabilities, and equity accounts that carry their balances forward to the next accounting period.

Clarify the purpose: Temporary accounts are used to measure performance over a specific period and are closed at the end of the accounting period to prepare for the next period. Permanent accounts are used to track the ongoing financial position of the company and are not closed.

Identify where they are reported: Temporary accounts are reported on the income statement (e.g., revenues and expenses), while permanent accounts are reported on the balance sheet (e.g., assets, liabilities, and equity).

Explain the closing process: Temporary accounts are closed by transferring their balances to permanent accounts (e.g., net income is transferred to retained earnings). This ensures that temporary accounts start with a zero balance in the next accounting period.

Highlight the distinction: Temporary accounts are essential for financial accounting and are not exclusive to managerial accounting. Permanent accounts are foundational for both financial and managerial accounting, as they represent the company's ongoing financial position.