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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following is a reason a company might seek outside investment earlier than usual?

To avoid diluting ownership at an early stage

To reduce the number of shareholders

Because the company has excess cash reserves

To accelerate growth that cannot be funded internally

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Verified step by step guidance

Understand the context: Companies often seek outside investment to fund operations, expand, or achieve strategic goals when internal resources are insufficient.

Analyze the options provided: Evaluate each reason listed to determine its relevance to the decision of seeking outside investment.

Option 1: 'To avoid diluting ownership at an early stage' - This is not a valid reason for seeking outside investment, as outside investment typically results in ownership dilution.

Option 2: 'To reduce the number of shareholders' - Seeking outside investment usually increases the number of shareholders, not reduces them, so this is not a valid reason.

Option 3: 'Because the company has excess cash reserves' - If a company has excess cash reserves, it would not need outside investment. The correct reason is 'To accelerate growth that cannot be funded internally,' as this aligns with the need for external funding to achieve growth objectives.