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

Welcome!

Financial Accounting

1. Introduction to Accounting

Welcome!

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Multiple Choice

You received $200 from your grandma for your birthday. According to sound financial-accounting principles, what should you do first?

Spend the $200 immediately on a gift for yourself.

Record the $200 as income in your personal financial records.

Ignore the $200 since it is a gift and not taxable.

Lend the $200 to a friend without documenting the transaction.

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Verified step by step guidance

Understand the concept of income recognition: In financial accounting, income is recorded when it is earned or received, regardless of its source. Gifts, such as the $200 received from your grandma, are considered personal income and should be documented in your financial records.

Determine the appropriate financial record: Identify where to record the $200 in your personal financial records. This could be a personal ledger, a budgeting app, or any system you use to track your finances.

Record the transaction: Create an entry in your financial records. Specify the date, the source of the income (e.g., 'Gift from Grandma'), and the amount received ($200). This ensures transparency and accuracy in your financial tracking.

Consider the tax implications: While personal gifts are generally not taxable, it is important to understand the tax laws in your jurisdiction. If the gift exceeds a certain threshold, it may have tax implications. Consult a tax professional if needed.

Use the recorded information for financial planning: Once the $200 is recorded, you can use this information to make informed decisions about how to allocate or spend the money, ensuring it aligns with your financial goals.