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

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Which statement best defines the term 'deductible' in the context of financial accounting?

The amount an insured party must pay out-of-pocket before an insurance company will cover any expenses.

The total amount of taxes owed to the government by a business entity.

The maximum amount an insurance company will pay for a covered loss.

The portion of income that is exempt from taxation.

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Verified step by step guidance

Understand the term 'deductible' in the context of financial accounting. A deductible is commonly associated with insurance policies and refers to the amount an insured party must pay out-of-pocket before the insurance company begins to cover expenses.

Analyze the options provided in the question. The correct definition should align with the concept of deductibles in insurance, which is a financial accounting term used to describe initial out-of-pocket expenses.

Option 1 states: 'The amount an insured party must pay out-of-pocket before an insurance company will cover any expenses.' This matches the definition of a deductible in insurance terms.

Option 2 states: 'The total amount of taxes owed to the government by a business entity.' This is unrelated to the concept of deductibles and pertains to tax obligations.

Option 3 and Option 4 also do not align with the definition of a deductible. Option 3 refers to the maximum amount an insurance company will pay, which is a coverage limit, and Option 4 refers to tax exemptions, which are unrelated to deductibles.