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

Buying a house can be described as which type of accounting activity?

Managerial accounting

Capital expenditure

Financial accounting

Tax accounting

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Verified step by step guidance

Understand the context of the question: Buying a house is a financial decision that involves the allocation of resources for a long-term asset. This is important for categorizing the type of accounting activity.

Review the definitions of the accounting activities mentioned: Managerial accounting focuses on internal decision-making, financial accounting deals with reporting financial information to external parties, tax accounting involves compliance with tax laws, and capital expenditure refers to spending on acquiring or improving long-term assets.

Identify the key term 'capital expenditure': Capital expenditure is a type of financial activity where funds are used to purchase or upgrade physical assets like property, equipment, or buildings. Buying a house fits this definition as it involves acquiring a long-term asset.

Relate the activity to financial accounting: Financial accounting records and reports transactions, including capital expenditures, to external stakeholders such as investors or creditors. Buying a house would be recorded as a capital expenditure in financial accounting.

Conclude that buying a house is primarily categorized as a capital expenditure, which is recorded under financial accounting activities, rather than managerial or tax accounting.