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 accounting concept is violated if a company records personal expenses of the owner as business expenses?

Accrual Concept

Business Entity Concept

Consistency Concept

Going Concern Concept

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Verified step by step guidance

Understand the Business Entity Concept: This concept states that the business and its owner are separate entities. Transactions and expenses of the business should be recorded separately from the personal transactions of the owner.

Identify the violation: If a company records personal expenses of the owner as business expenses, it violates the Business Entity Concept because it mixes personal and business transactions.

Review the other concepts for clarity: The Accrual Concept relates to recognizing revenues and expenses when they are incurred, not when cash is received or paid. The Consistency Concept ensures that accounting methods are applied consistently over time. The Going Concern Concept assumes the business will continue operating in the foreseeable future.

Eliminate irrelevant concepts: Since the issue is about mixing personal and business transactions, the Accrual, Consistency, and Going Concern Concepts are not applicable in this scenario.

Conclude the correct concept: The violation pertains specifically to the Business Entity Concept, as it ensures the separation of personal and business financial activities.