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

Which of the following is a potential liability associated with business ownership?

Sales revenue

Retained earnings

Accounts payable

Inventory

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Understand the concept of liabilities in financial accounting. A liability is an obligation that a business owes to external parties, typically arising from past transactions or events, and is expected to be settled through the transfer of assets, services, or other economic benefits.

Review the options provided in the problem: Sales revenue, Retained earnings, Accounts payable, and Inventory. Determine which of these represents a liability.

Recognize that 'Sales revenue' is an income account, representing the earnings generated from selling goods or services, and is not a liability.

Understand that 'Retained earnings' is part of equity, representing the accumulated profits of the business that have not been distributed to shareholders, and is not a liability.

Identify 'Accounts payable' as a liability because it represents amounts owed by the business to suppliers or creditors for goods or services received but not yet paid for. Inventory, on the other hand, is an asset, as it represents goods available for sale or use in production.