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 best describes the par value of a stock?

The amount paid by investors when purchasing stock from the secondary market.

The nominal value assigned to a share of stock in the corporate charter, having little relation to its market value.

The total dividends paid to shareholders during the fiscal year.

The current market price at which the stock is traded on the exchange.

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Verified step by step guidance

Understand the concept of par value: Par value is the nominal or face value assigned to a share of stock in the corporate charter. It is a legal value and does not necessarily reflect the stock's market value.

Differentiate par value from market value: Market value is the price at which a stock is traded on the stock exchange, which fluctuates based on supply and demand. Par value, on the other hand, is a fixed value stated in the corporate charter.

Eliminate incorrect options: The amount paid by investors when purchasing stock from the secondary market refers to the market price, not par value. Similarly, the total dividends paid to shareholders and the current market price are unrelated to the concept of par value.

Identify the correct description: The correct answer is the nominal value assigned to a share of stock in the corporate charter, having little relation to its market value.

Conclude: Par value is primarily a legal or accounting concept and is often set at a very low amount (e.g., $0.01 per share) to meet regulatory requirements.