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

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

Why is it risky to base your investment strategy solely on picking individual stocks?

It eliminates the need for ongoing research and monitoring of investments.

It increases exposure to unsystematic risk, which cannot be diversified away by holding only a few stocks.

It guarantees higher returns compared to investing in index funds.

It ensures that all investments will outperform the overall market.

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Verified step by step guidance

Understand the concept of unsystematic risk: Unsystematic risk refers to the risk associated with a specific company or industry. It is unique to individual stocks and can be mitigated through diversification.

Recognize the importance of diversification: Diversification involves spreading investments across various assets or industries to reduce exposure to unsystematic risk. By holding only a few stocks, an investor is more vulnerable to the performance of those specific stocks.

Compare individual stock investing to index funds: Index funds are diversified portfolios that track the performance of a market index, reducing unsystematic risk and providing more stable returns over time.

Evaluate the need for ongoing research: Investing in individual stocks requires continuous monitoring and research to stay informed about company performance, industry trends, and market conditions. This can be time-consuming and challenging for many investors.

Understand the misconception of guaranteed returns: No investment strategy guarantees higher returns or outperformance of the market. Individual stock investing carries higher risk and does not ensure better results compared to diversified strategies like index funds.