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

Leasing a car is a method of financing where someone:

purchases the car outright with a lump sum payment

borrows money to buy the car and repays the loan over time

receives ownership of the car at the start of the agreement

pays to use the car for a specified period without owning it

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Verified step by step guidance

Understand the concept of leasing: Leasing is a financial arrangement where an individual pays to use an asset, such as a car, for a specified period without gaining ownership of the asset.

Identify the key features of leasing: The lessee (person leasing the car) makes periodic payments to the lessor (owner of the car) for the right to use the car. Ownership remains with the lessor throughout the lease term.

Compare leasing to other financing methods: Unlike purchasing outright or borrowing money to buy, leasing does not involve ownership transfer. Instead, it is a rental agreement for a fixed term.

Recognize the financial accounting implications: Lease payments are recorded as expenses in the lessee's accounts, and the car is not listed as an asset on the lessee's balance sheet.

Apply the concept to the problem: Based on the description provided, the correct answer aligns with the definition of leasing, which is paying to use the car for a specified period without owning it.