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 events increases the equity in a business?

The owner invests additional cash into the business

The business pays dividends to shareholders

The business purchases equipment with cash

The business incurs an operating loss

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Verified step by step guidance

Understand the concept of equity: Equity represents the owner's residual interest in the assets of the business after deducting liabilities. It can increase through owner contributions or retained earnings.

Analyze the first option: 'The owner invests additional cash into the business.' This action increases equity because the owner's contribution adds to the capital account, which is part of equity.

Analyze the second option: 'The business pays dividends to shareholders.' Paying dividends reduces retained earnings, which is a component of equity, so this action decreases equity.

Analyze the third option: 'The business purchases equipment with cash.' This action does not directly affect equity because it involves exchanging one asset (cash) for another asset (equipment). Equity remains unchanged.

Analyze the fourth option: 'The business incurs an operating loss.' Operating losses reduce retained earnings, which decreases equity. Therefore, this action does not increase equity.