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 statements typifies defined contribution plans?

The plan's assets and liabilities are reported on the employer's balance sheet.

The employer's obligation is limited to making specified contributions to the plan.

The employer bears the investment risk associated with the plan assets.

The employer guarantees a specific retirement benefit amount to employees.

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Verified step by step guidance

Understand the concept of a defined contribution plan: A defined contribution plan is a type of retirement plan where the employer's obligation is limited to making specified contributions to the plan, and the employee bears the investment risk.

Compare the characteristics of a defined contribution plan with the statements provided in the problem. For example, the employer does not guarantee a specific retirement benefit amount; instead, the benefits depend on the investment performance of the contributions made.

Analyze the statement 'The plan's assets and liabilities are reported on the employer's balance sheet.' This is incorrect for defined contribution plans because the employer does not report the plan's assets and liabilities on their balance sheet; these are managed separately.

Evaluate the statement 'The employer bears the investment risk associated with the plan assets.' This is incorrect for defined contribution plans because the investment risk is borne by the employee, not the employer.

Identify the correct statement: 'The employer's obligation is limited to making specified contributions to the plan.' This aligns with the definition of a defined contribution plan, making it the correct answer.