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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Pete wants a loan of \$1 to start a small business. Which type of accounting would be most relevant for preparing the financial statements required by the bank to assess his loan application?

Tax accounting

Managerial accounting

Financial accounting

Cost accounting

Previous problemNext problem

Verified step by step guidance

Understand the purpose of the financial statements required by the bank. Banks typically require financial statements to assess the financial health, creditworthiness, and ability of the borrower to repay the loan.

Recognize that financial accounting is the branch of accounting focused on preparing standardized financial statements, such as the balance sheet, income statement, and cash flow statement, which are used by external parties like banks, investors, and regulators.

Differentiate financial accounting from other types of accounting mentioned in the problem: Tax accounting focuses on compliance with tax laws, managerial accounting is used for internal decision-making, and cost accounting deals with analyzing costs for production and operations.

Conclude that financial accounting is the most relevant type of accounting for preparing the financial statements required by the bank, as it provides the standardized and externally-focused information needed for loan assessment.

Apply this understanding to similar scenarios where external stakeholders require financial information, reinforcing the importance of financial accounting in such contexts.