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 financial accounting, what information would you expect to find about individuals who are described as 'credit risks'?

They have a history of late payments or defaulting on loans.

They are guaranteed approval for all types of credit.

They consistently maintain a high credit score and pay debts on time.

They are exempt from financial reporting requirements.

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Verified step by step guidance

Understand the term 'credit risk': In financial accounting, 'credit risk' refers to the possibility that an individual or entity may fail to meet their financial obligations, such as repaying loans or making timely payments.

Analyze the options provided: Evaluate each statement to determine which aligns with the definition of 'credit risk' and the characteristics typically associated with individuals who pose a credit risk.

Option 1: 'They have a history of late payments or defaulting on loans.' This aligns with the definition of credit risk, as individuals with such a history are considered more likely to fail in meeting future financial obligations.

Option 2: 'They are guaranteed approval for all types of credit.' This does not align with the concept of credit risk, as individuals with high credit risk are less likely to be approved for credit due to their financial history.

Option 3: 'They consistently maintain a high credit score and pay debts on time.' This describes individuals with low credit risk, which is the opposite of the term being analyzed. Option 4: 'They are exempt from financial reporting requirements.' This is unrelated to the concept of credit risk and does not provide relevant information.