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

Sharon is the policyowner of a $50,000 life insurance policy. Which type of accounting would most appropriately be used to record the premium payments and benefits related to this policy in the insurance company's financial statements?

Managerial accounting

Financial accounting

Cost accounting

Tax accounting

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Verified step by step guidance

Understand the context: The problem is asking which type of accounting is most appropriate for recording premium payments and benefits related to a life insurance policy in the insurance company's financial statements.

Clarify the purpose of financial accounting: Financial accounting focuses on recording, summarizing, and reporting financial transactions to external stakeholders, such as investors, regulators, and creditors. It ensures compliance with accounting standards and provides transparency.

Eliminate other options: Managerial accounting is used for internal decision-making and planning, cost accounting focuses on analyzing costs for operational efficiency, and tax accounting deals with compliance with tax laws. None of these are primarily concerned with external financial reporting.

Relate the concept to the problem: Since the insurance company needs to record premium payments and benefits in its financial statements for external reporting purposes, financial accounting is the appropriate choice.

Conclude the reasoning: The correct answer is financial accounting because it aligns with the requirement to record and report transactions in the company's financial statements for external stakeholders.