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 one of the following questions is a working capital management decision?

Should the company acquire a new manufacturing plant?

Should the company increase its inventory levels to meet anticipated demand?

Should the company change its depreciation method for fixed assets?

Should the company issue new shares to raise capital?

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Verified step by step guidance

Understand the concept of working capital management: Working capital management involves managing the short-term assets and liabilities of a company to ensure it can meet its operational needs and maintain financial stability.

Identify the key components of working capital: These include current assets (e.g., inventory, accounts receivable, cash) and current liabilities (e.g., accounts payable, short-term debt). Decisions related to these components are part of working capital management.

Analyze the options provided in the question: Determine which option directly relates to managing short-term assets or liabilities. For example, increasing inventory levels is a decision about current assets, which is a key aspect of working capital management.

Eliminate options that are not related to working capital management: Decisions about acquiring a manufacturing plant, changing depreciation methods, or issuing new shares are related to long-term investments, accounting policies, or financing decisions, not working capital management.

Conclude that the correct answer is the option that involves increasing inventory levels to meet anticipated demand, as this directly impacts the management of current assets and is a working capital management decision.