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

The profitability of financial market intermediaries depends primarily upon which of the following?

The value of their physical assets

The spread between the interest rates they pay on liabilities and the interest rates they earn on assets

The amount of government subsidies received

The total number of clients they serve

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Verified step by step guidance

Understand the role of financial market intermediaries: These entities, such as banks, earn profits by managing the flow of funds between savers and borrowers. Their profitability is influenced by the difference between the interest rates they pay and the interest rates they earn.

Define the concept of 'spread': The spread refers to the difference between the interest rate paid on liabilities (e.g., deposits) and the interest rate earned on assets (e.g., loans). This spread is a key determinant of profitability for financial intermediaries.

Analyze why physical assets are less relevant: While physical assets like buildings and equipment are important for operations, they do not directly impact the profitability derived from interest rate spreads.

Evaluate the role of government subsidies: Government subsidies may provide financial support, but they are not the primary factor influencing profitability for financial intermediaries.

Consider the number of clients served: While serving more clients can increase revenue, the profitability of intermediaries is primarily driven by the interest rate spread rather than the sheer number of clients.