Multiple Choice
Which of the following is NOT one of the six functional areas of business?
9
views
1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following best describes the purpose of a mortgage?
A
To record the depreciation of fixed assets over their useful lives.
B
To allocate company profits among shareholders.
C
To provide a loan secured by real estate, allowing the borrower to purchase property while the lender holds a claim until the loan is repaid.
D
To track the revenues and expenses of a business for tax purposes.
Verified step by step guidance1
Understand the concept of a mortgage: A mortgage is a type of loan specifically designed for purchasing real estate. It is secured by the property itself, meaning the lender has a legal claim to the property until the loan is fully repaid.
Analyze the options provided in the question: Each option describes a different financial concept. For example, depreciation relates to fixed assets, profit allocation pertains to shareholders, and tracking revenues and expenses is related to tax purposes.
Identify the correct purpose of a mortgage: The correct purpose is to provide a loan secured by real estate, allowing the borrower to purchase property while the lender holds a claim until the loan is repaid.
Eliminate incorrect options: Depreciation, profit allocation, and tax tracking are unrelated to the concept of a mortgage. These are distinct financial processes that serve different purposes.
Conclude that the correct answer aligns with the definition of a mortgage, which is a loan secured by real estate for property purchase.
4:10mWatch next
Master Types of Accounting: Financial and Managerial with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Types of Accounting practice set
Problem sets built by lead tutorsExpert video explanations