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 statements is correct regarding the classification of a car in accounting?

A car is recorded as revenue.

A car is treated as an intangible asset.

A car is considered a depreciating asset.

A car is classified as a current liability.

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Verified step by step guidance

Understand the nature of the asset: A car is a physical, tangible item that is used in business operations, making it a tangible asset rather than an intangible asset.

Determine the classification of the car: Since a car is not sold as part of the business's primary operations, it is not recorded as revenue. Revenue refers to income earned from the sale of goods or services.

Evaluate the car's usage and lifespan: A car typically has a useful life of more than one year and is subject to depreciation over time due to wear and tear, making it a depreciating asset.

Consider the liability classification: A car is not a current liability. Current liabilities are obligations that are due within one year, such as accounts payable or short-term loans.

Conclude the correct classification: Based on the above analysis, a car is considered a depreciating asset because it is a tangible asset with a finite useful life that loses value over time.