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 is an example of discretionary spending?

Interest on long-term debt

Advertising expenses

Depreciation expense

Income tax payments

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Verified step by step guidance

Understand the concept of discretionary spending: Discretionary spending refers to expenses that a company can choose to incur or not, depending on its priorities and financial situation. These are not mandatory and can be adjusted or eliminated without violating any legal or contractual obligations.

Analyze each option provided in the problem: Review the nature of each expense to determine whether it is discretionary or non-discretionary.

Evaluate 'Interest on long-term debt': This is a non-discretionary expense because it is a contractual obligation that the company must pay to avoid defaulting on its debt.

Evaluate 'Advertising expenses': This is a discretionary expense because the company can decide whether to spend on advertising based on its budget and strategic goals.

Evaluate 'Depreciation expense' and 'Income tax payments': Depreciation expense is non-discretionary as it is an accounting allocation of the cost of assets over their useful life, and income tax payments are mandatory obligations imposed by law.