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

In the context of accounting, which type of account typically involves funds being locked for a fixed period, restricting immediate access to the money?

Checking account

Traditional savings account

Certificate of Deposit (CD) account

Money market account

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Verified step by step guidance

Understand the concept of a Certificate of Deposit (CD) account: A CD account is a type of savings account where funds are deposited for a fixed term, such as 6 months, 1 year, or more, and cannot be withdrawn without penalty until the term ends.

Compare the features of a CD account with other types of accounts: Checking accounts and traditional savings accounts typically allow immediate access to funds, while money market accounts may have restrictions but still offer more flexibility than CDs.

Recognize the key characteristic of a CD account: The funds are locked for a fixed period, meaning the depositor agrees not to withdraw the money until the maturity date, in exchange for a higher interest rate compared to other accounts.

Understand the implications of the fixed term: The depositor earns interest on the funds during the locked period, but early withdrawal may result in penalties, reducing the overall earnings.

Apply this knowledge to identify the correct answer: Among the options provided, the Certificate of Deposit (CD) account is the one that restricts immediate access to funds due to the fixed term requirement.