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

Why might some 20-year-olds have difficulty investing \$360 per month for retirement?

They are required by law to invest only in employer-sponsored retirement plans.

They receive higher investment returns than older investors, making smaller contributions sufficient.

They are not allowed to open any investment accounts until age 30.

They may have limited income due to entry-level jobs or ongoing education expenses.

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Verified step by step guidance

Understand the context of the problem: The question is asking why some 20-year-olds might face challenges in investing a specific amount for retirement. This requires analyzing financial and life circumstances typical for individuals in this age group.

Clarify the incorrect options: Review each of the incorrect statements provided in the question. For example, the claim that 20-year-olds are required by law to invest only in employer-sponsored retirement plans is false, as there is no such legal restriction. Similarly, the idea that they receive higher investment returns than older investors is not universally true and does not address the difficulty in investing. Lastly, the statement that they are not allowed to open investment accounts until age 30 is factually incorrect.

Focus on the correct answer: The correct answer highlights that 20-year-olds may have limited income due to entry-level jobs or ongoing education expenses. This is a realistic financial challenge for many young adults, as they are often just starting their careers or still completing their education, which limits their disposable income.

Relate the concept to financial accounting: Limited income affects an individual's ability to allocate funds for long-term investments like retirement. This ties into the concept of budgeting and cash flow management, which are key principles in financial accounting. Understanding how to prioritize expenses and savings is crucial for financial planning.

Conclude with practical advice: Encourage students to consider strategies for overcoming these challenges, such as starting with smaller contributions, seeking employer matching programs, or exploring low-cost investment options. This approach aligns with the principles of financial planning and accounting, emphasizing the importance of early and consistent investment for retirement.