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

Which statement best describes stocks?

Stocks are debt instruments that must be repaid at maturity.

Stocks guarantee a fixed interest payment to investors.

Stocks are short-term financial instruments with maturities less than one year.

Stocks represent ownership shares in a corporation.

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Verified step by step guidance

Understand the concept of stocks: Stocks represent ownership in a corporation, giving shareholders a claim on the company's assets and earnings.

Differentiate stocks from debt instruments: Unlike bonds or loans, stocks do not require repayment at maturity because they are equity instruments, not debt.

Clarify the payment structure: Stocks do not guarantee fixed interest payments. Instead, shareholders may receive dividends, which are discretionary and depend on the company's profitability and policies.

Examine the time horizon: Stocks are not short-term financial instruments with maturities less than one year. They are long-term investments and do not have a maturity date.

Conclude with the correct definition: Stocks represent ownership shares in a corporation, providing investors with voting rights and potential dividends, depending on the type of stock (common or preferred).