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

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Which of the following is a way that a company can finance the purchase of assets?

Writing off obsolete inventory

Recognizing revenue from sales

Issuing equity shares to investors

Recording depreciation expense

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Verified step by step guidance

Understand the concept of financing: Financing refers to the methods a company uses to raise funds to purchase assets or support operations. Common methods include issuing equity, taking loans, or using retained earnings.

Analyze the options provided: Writing off obsolete inventory, recognizing revenue from sales, and recording depreciation expense are not methods of financing. These are accounting actions that affect financial statements but do not directly raise funds.

Focus on the correct option: Issuing equity shares to investors is a valid financing method. When a company issues equity shares, it raises capital by selling ownership stakes to investors, which can then be used to purchase assets.

Explain why the other options are incorrect: Writing off obsolete inventory is an accounting adjustment to reduce the value of inventory. Recognizing revenue from sales is the process of recording income earned, not raising funds. Recording depreciation expense is an accounting entry to allocate the cost of an asset over its useful life, not a financing activity.

Conclude with the importance of equity issuance: Issuing equity shares is a common way for companies to finance asset purchases, as it provides immediate capital without incurring debt obligations.