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

When a company buys a new machine for its warehouse, which type of accounting is primarily responsible for recording this transaction?

Financial accounting

Tax accounting

Managerial accounting

Forensic accounting

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Verified step by step guidance

Understand the nature of the transaction: The company is purchasing a new machine for its warehouse, which is a capital expenditure. This transaction involves recording the acquisition of a tangible asset.

Identify the purpose of recording: Financial accounting is primarily responsible for recording transactions that affect the financial position of the company, such as assets, liabilities, and equity. This ensures accurate reporting in financial statements.

Distinguish between accounting types: Tax accounting focuses on compliance with tax laws, managerial accounting aids internal decision-making, and forensic accounting investigates financial discrepancies. None of these are directly responsible for recording asset purchases in financial statements.

Relate the transaction to financial statements: The purchase of the machine will be recorded as an asset on the balance sheet under 'Property, Plant, and Equipment' (PP&E). Financial accounting ensures this is accurately reflected.

Conclude the correct accounting type: Since financial accounting is responsible for preparing financial statements and recording transactions that impact the company's financial position, it is the correct type of accounting for this transaction.