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 of the following best describes the primary difference between debt financing and equity financing?

Debt financing is only available to public companies, while equity financing is available to all businesses.

Debt financing increases the number of shareholders, while equity financing increases the company's liabilities.

Debt financing requires giving up ownership in the company, while equity financing does not.

Debt financing involves borrowing funds that must be repaid with interest, while equity financing involves raising capital by selling ownership shares in the company.

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Verified step by step guidance

Understand the concept of debt financing: Debt financing involves borrowing funds from external sources, such as banks or bondholders, which must be repaid over time along with interest. It does not involve giving up ownership in the company.

Understand the concept of equity financing: Equity financing involves raising capital by selling ownership shares (stock) in the company to investors. This method does not require repayment but does dilute ownership among shareholders.

Compare the two methods: Debt financing creates a liability on the company's balance sheet and requires regular interest payments, while equity financing increases the number of shareholders and does not create a repayment obligation.

Clarify the ownership aspect: Debt financing does not require giving up ownership, whereas equity financing involves sharing ownership with investors who purchase shares.

Summarize the primary difference: Debt financing is borrowing funds with repayment and interest obligations, while equity financing is raising capital by selling ownership shares without repayment obligations.