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

Taking receipt of premiums and holding them for the insurance company is an example of which type of accounting?

Cost accounting

Fiduciary accounting

Tax accounting

Managerial accounting

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Verified step by step guidance

Understand the concept of fiduciary accounting: Fiduciary accounting involves managing and reporting financial transactions where one party holds assets or funds on behalf of another party, such as an insurance company holding premiums for policyholders.

Analyze the scenario: Taking receipt of premiums and holding them for the insurance company implies a responsibility to manage funds on behalf of the insurance company, which aligns with fiduciary duties.

Compare the options: Cost accounting focuses on tracking and analyzing costs within a business, tax accounting deals with tax-related financial matters, and managerial accounting supports internal decision-making. None of these options involve holding funds for another party.

Match the scenario to the correct type of accounting: Since the activity involves holding funds for another entity, it falls under fiduciary accounting, which is specifically designed for such responsibilities.

Conclude the reasoning: Fiduciary accounting is the correct answer because it directly relates to the management and reporting of funds held on behalf of another party, such as premiums for an insurance company.