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 is a primary method a company can use to raise money?

Reclassifying assets as liabilities

Recording depreciation expense

Paying dividends to shareholders

Issuing shares of stock (equity financing)

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Verified step by step guidance

Understand the concept of equity financing: Equity financing is a method by which a company raises money by issuing shares of stock to investors. This provides the company with capital in exchange for ownership stakes in the business.

Review the incorrect options: Reclassifying assets as liabilities does not raise money; it is an accounting adjustment. Recording depreciation expense is a non-cash accounting entry that allocates the cost of an asset over its useful life. Paying dividends to shareholders involves distributing profits, not raising funds.

Focus on the correct option: Issuing shares of stock is a primary method for raising money. When a company issues stock, it sells ownership shares to investors, who provide capital in return.

Consider the implications of equity financing: By issuing shares, the company does not incur debt but instead shares ownership with investors. This can dilute existing ownership but provides funds without the obligation to repay.

Summarize the key takeaway: Equity financing through issuing shares of stock is a fundamental way for companies to raise capital, especially when they want to avoid taking on debt.