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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following is a type of investment commonly used by banks to generate profit?

Buying raw materials for production

Acquiring manufacturing equipment

Purchasing government and corporate bonds

Investing in inventory for resale

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Verified step by step guidance

Understand the role of banks in the financial system: Banks primarily focus on financial investments rather than physical assets like raw materials or manufacturing equipment. Their goal is to generate profit through financial instruments.

Recognize the types of investments banks commonly use: Banks often invest in government and corporate bonds because these are relatively low-risk and provide steady returns, aligning with their profit-generation goals.

Eliminate options that are not relevant to banks: Buying raw materials for production and acquiring manufacturing equipment are activities typically associated with manufacturing companies, not banks.

Consider the nature of inventory investments: Investing in inventory for resale is more relevant to retail or wholesale businesses, not banks, as banks do not deal in physical goods.

Conclude that purchasing government and corporate bonds is the correct answer, as it aligns with the financial investment strategies commonly employed by banks to generate profit.