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

The total amount paid for the use of credit is based on which of the following factors?

The principal, interest rate, and length of time the credit is used

The type of collateral provided

The borrower's annual income

Only the principal amount borrowed

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Verified step by step guidance

Understand the concept of credit cost: The total amount paid for the use of credit is determined by the principal (the amount borrowed), the interest rate (the percentage charged for borrowing), and the length of time the credit is used (duration of the loan). These factors directly influence the total cost of borrowing.

Analyze the options provided: Evaluate each option to determine which factors are relevant to calculating the total cost of credit. For example, the type of collateral provided and the borrower's annual income may influence loan approval but do not directly affect the calculation of the total cost.

Focus on the correct factors: The principal amount borrowed, the interest rate, and the length of time are the key components used in the formula for calculating the total cost of credit. These are universally applicable in financial accounting and loan calculations.

Eliminate irrelevant options: Disregard options that do not directly contribute to the calculation of the total cost of credit, such as the type of collateral or the borrower's annual income.

Conclude with the correct answer: The total amount paid for the use of credit is based on the principal, interest rate, and length of time the credit is used. These factors are essential in determining the cost of borrowing.