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

Under which type of accounting are a firm's insurance premiums generally considered period costs?

Tax accounting

Cost accounting

Managerial accounting

Financial accounting

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Verified step by step guidance

Understand the concept of period costs: Period costs are expenses that are not directly tied to the production of goods or services and are expensed in the period they are incurred. Examples include insurance premiums, rent, and administrative expenses.

Recognize the different types of accounting mentioned in the problem: Tax accounting focuses on compliance with tax laws, cost accounting deals with tracking and analyzing costs for production, managerial accounting supports internal decision-making, and financial accounting provides information for external stakeholders.

Identify the type of accounting that categorizes insurance premiums as period costs: Insurance premiums are generally considered period costs under cost accounting because they are not directly tied to the production process but are necessary for the overall operation of the business.

Clarify why other types of accounting do not categorize insurance premiums as period costs: For example, tax accounting may treat insurance premiums differently based on tax regulations, managerial accounting may focus on internal allocation, and financial accounting may classify them differently for reporting purposes.

Conclude that cost accounting is the correct type of accounting for categorizing insurance premiums as period costs, as it focuses on the classification and analysis of costs incurred during a specific period.