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 type of accounting allows a company to change its accounting policies if it can justify that the new policy provides more reliable and relevant information?

Managerial accounting

Cost accounting

Tax accounting

Financial accounting

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Verified step by step guidance

Understand the context of the question: The problem is asking about the type of accounting that permits changes in accounting policies when justified by improved reliability and relevance of information.

Review the characteristics of each type of accounting mentioned: Managerial accounting focuses on internal decision-making, cost accounting deals with cost analysis, and tax accounting adheres to tax regulations. Financial accounting, however, is governed by standards like GAAP or IFRS, which allow changes in policies under specific conditions.

Learn the principle of reliability and relevance in financial accounting: Financial accounting emphasizes providing information that is both reliable (accurate and verifiable) and relevant (useful for decision-making). Changes in accounting policies are permitted if they enhance these qualities.

Understand the role of accounting standards: Financial accounting operates under frameworks such as GAAP or IFRS, which explicitly allow changes in accounting policies if the new policy results in more reliable and relevant financial reporting.

Conclude that financial accounting is the correct answer: Based on the explanation above, financial accounting is the type of accounting that allows changes in policies under the justification of improved reliability and relevance.