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

Why is it generally recommended to save 3–6 months’ worth of expenses in your emergency fund?

Because it is the minimum amount needed to qualify for a mortgage.

To maximize interest earnings on your emergency fund.

To provide a financial cushion in case of unexpected events such as job loss or medical emergencies.

Because banks require this amount to open a savings account.

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Verified step by step guidance

Understand the concept of an emergency fund: An emergency fund is a financial safety net designed to cover unexpected expenses or financial disruptions, such as job loss, medical emergencies, or major repairs.

Identify the purpose of saving 3–6 months’ worth of expenses: This amount is generally recommended because it provides a sufficient financial cushion to handle unforeseen events without resorting to debt or financial hardship.

Evaluate why other options are incorrect: For example, saving 3–6 months’ worth of expenses is not a requirement for qualifying for a mortgage, nor is it specifically aimed at maximizing interest earnings. Similarly, banks do not require this amount to open a savings account.

Recognize the correct reasoning: The primary goal of an emergency fund is to ensure financial stability during unexpected events, allowing individuals to maintain their standard of living and meet essential expenses without relying on external financial support.

Apply this understanding to personal financial planning: Assess your monthly expenses and calculate 3–6 months’ worth of costs to determine the target amount for your emergency fund. This ensures you are prepared for potential financial challenges.