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 types of investments typically generate interest income?

Preferred stocks

Common stocks

Corporate bonds

Savings accounts

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Verified step by step guidance

Understand the concept of interest income: Interest income is the earnings generated from investments that pay interest, such as bonds, savings accounts, or other fixed-income securities. It is distinct from dividend income, which is earned from stocks.

Analyze the investment types provided: Preferred stocks and common stocks typically generate dividend income, not interest income. Dividends are payments made by companies to shareholders from their profits.

Focus on corporate bonds: Corporate bonds are debt securities issued by companies to raise capital. Investors who purchase these bonds earn interest income, as the company pays periodic interest (coupon payments) to bondholders.

Consider savings accounts: Savings accounts are deposit accounts held at financial institutions that pay interest on the balance maintained in the account. This interest income is typically calculated based on the account's annual percentage yield (APY).

Conclude that corporate bonds and savings accounts are the correct answers: Both corporate bonds and savings accounts generate interest income, as they involve payments based on a fixed interest rate or yield.