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

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Typical asset classes used for diversification include all of the following except:

Real estate

Equities

Accounts payable

Commodities

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Verified step by step guidance

Understand the concept of asset classes: Asset classes are categories of investments that share similar characteristics and behave similarly in the marketplace. Common asset classes include equities (stocks), real estate, commodities, and fixed income (bonds).

Recognize the purpose of diversification: Diversification involves spreading investments across different asset classes to reduce risk. Each asset class reacts differently to market conditions, which helps balance the overall portfolio performance.

Identify the asset classes listed in the problem: The options provided are Real estate, Equities, Commodities, and Accounts payable.

Clarify the nature of accounts payable: Accounts payable is not an asset class; it is a liability on the balance sheet representing amounts owed to suppliers or creditors. It does not qualify as an investment category for diversification purposes.

Conclude that accounts payable is the correct answer because it is not an asset class used for diversification, unlike real estate, equities, and commodities.