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 of the following is NOT typically considered a common startup cost that most businesses need to plan for before starting operations?

Legal and licensing fees

Dividends paid to shareholders

Inventory purchases

Employee salaries and wages

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Verified step by step guidance

Step 1: Understand the concept of startup costs. Startup costs are the initial expenses incurred by a business before it begins operations. These typically include expenses necessary to establish the business, such as legal fees, licensing fees, inventory purchases, and employee salaries.

Step 2: Analyze each option provided in the question. Legal and licensing fees are common startup costs because businesses often need to register and obtain permits before operating. Inventory purchases are also common startup costs for businesses that sell goods, as they need stock to begin sales. Employee salaries and wages are necessary to hire staff for operations.

Step 3: Consider the nature of dividends. Dividends are payments made to shareholders from a company's profits. They are not considered startup costs because they are distributed after the business generates profit, not during the initial setup phase.

Step 4: Compare dividends to the other options. Unlike legal fees, inventory purchases, and employee wages, dividends are not directly related to starting operations but are instead a financial decision made later in the business lifecycle.

Step 5: Conclude that dividends paid to shareholders are NOT typically considered a common startup cost, as they occur after the business is operational and profitable.