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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Struggling with Financial Accounting?

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Multiple Choice

Which of the following statements is the correct definition of a creditor?

A creditor is a person or entity that owns shares in a company.

A creditor is an employee who manages the financial records of a business.

A creditor is an individual or institution to whom a business owes money as a result of purchasing goods or services on credit.

A creditor is a customer who purchases goods or services from a business on credit.

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Verified step by step guidance

Step 1: Understand the term 'creditor' in financial accounting. A creditor is an individual or institution to whom a business owes money. This typically arises when a business purchases goods or services on credit, meaning payment is deferred to a later date.

Step 2: Analyze the options provided in the problem. Each option describes a different role or relationship in financial accounting. Compare these definitions to the correct definition of a creditor.

Step 3: Eliminate incorrect options. For example, owning shares in a company describes a shareholder, not a creditor. Managing financial records describes an accountant, not a creditor. A customer who purchases goods or services on credit is a debtor, not a creditor.

Step 4: Identify the correct definition. The correct definition aligns with the explanation in Step 1: A creditor is an individual or institution to whom a business owes money as a result of purchasing goods or services on credit.

Step 5: Confirm your understanding by reviewing the concept of accounts payable in financial accounting, which represents amounts owed to creditors for goods or services received but not yet paid for.