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

Which of the following costs associated with a delivery van should NOT be capitalized?

Cost of installing a new engine

Purchase price of the van

Sales tax paid at acquisition

Routine maintenance and oil changes

Previous problemNext problem

Verified step by step guidance

Understand the concept of capitalization: Capitalization refers to recording a cost as an asset on the balance sheet rather than an expense on the income statement. Costs that provide future economic benefits and extend the useful life of an asset are typically capitalized.

Review the costs listed in the problem: Analyze each cost to determine whether it provides future economic benefits or is a routine expense. For example, the cost of installing a new engine extends the useful life of the van, so it should be capitalized.

Evaluate the purchase price and sales tax: The purchase price of the van and the sales tax paid at acquisition are directly related to acquiring the asset and should be capitalized as part of the van's initial cost.

Consider routine maintenance and oil changes: Routine maintenance and oil changes are recurring expenses that do not extend the useful life of the van or provide future economic benefits. These costs should be expensed in the period incurred rather than capitalized.

Conclude that routine maintenance and oil changes should NOT be capitalized: These costs are considered operating expenses and are recorded on the income statement rather than the balance sheet.