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 best describes the main idea of credit cards in the context of accounting?

Credit cards are used to record only cash transactions in the accounting system.

Credit cards are a type of fixed asset that depreciates over time.

Credit cards allow individuals or businesses to make purchases now and pay for them later, creating a liability until the balance is paid.

Credit cards represent a company's equity in the balance sheet.

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Verified step by step guidance

Understand the concept of credit cards in accounting: Credit cards are a financial tool that allows individuals or businesses to make purchases without immediate payment, creating a liability until the balance is settled.

Analyze the options provided: Evaluate each statement to determine its accuracy in describing the role of credit cards in accounting.

Option 1: 'Credit cards are used to record only cash transactions in the accounting system.' This is incorrect because credit card transactions are not cash transactions; they create liabilities.

Option 2: 'Credit cards are a type of fixed asset that depreciates over time.' This is incorrect because credit cards are not physical assets; they are a financial instrument and do not depreciate.

Option 4: 'Credit cards represent a company's equity in the balance sheet.' This is incorrect because credit cards create liabilities, not equity. The correct answer is the third option, which accurately describes credit cards as creating a liability until the balance is paid.