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 of the following transactions would normally be recorded as an asset when cash is paid?

Paying a utility bill for the current month

Paying monthly rent in advance

Purchasing office equipment for cash

Paying salaries to employees

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Verified step by step guidance

Step 1: Understand the concept of an asset. An asset is a resource owned by a company that provides future economic benefits. Examples include cash, equipment, prepaid expenses, and accounts receivable.

Step 2: Analyze each transaction to determine whether it meets the definition of an asset. Paying a utility bill for the current month is an expense because it does not provide future economic benefits—it is consumed immediately.

Step 3: Evaluate the transaction of paying monthly rent in advance. This qualifies as a prepaid expense, which is considered an asset because it represents a future economic benefit (the right to use the rented space in the future).

Step 4: Examine the transaction of purchasing office equipment for cash. Office equipment is a tangible asset that provides future economic benefits, so this transaction would be recorded as an asset.

Step 5: Assess the transaction of paying salaries to employees. Salaries are an expense because they are consumed immediately and do not provide future economic benefits, so this would not be recorded as an asset.