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 is primarily responsible for recording and reporting transactions such as a policy loan taken by a life insurance policyowner against the cash value of their policy?

Tax accounting

Insurance accounting

Managerial accounting

Financial accounting

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Verified step by step guidance

Understand the nature of the transaction: A policy loan taken by a life insurance policyowner against the cash value of their policy is a transaction specific to the insurance industry. It involves recording the loan and its impact on the cash value of the policy.

Identify the type of accounting that deals with industry-specific transactions: Insurance accounting is specialized to handle transactions unique to insurance companies, such as policy loans, premium payments, and claims.

Differentiate between the other types of accounting: Tax accounting focuses on compliance with tax laws and regulations, managerial accounting is used for internal decision-making, and financial accounting deals with general financial reporting for external stakeholders.

Recognize that insurance accounting is the correct answer because it is tailored to record and report transactions specific to the insurance industry, including policy loans.

Conclude that the correct type of accounting for this transaction is insurance accounting, as it ensures accurate reporting and compliance within the insurance sector.